Meta4Hand Inc v Research In Motion Ltd, 2017 ABQB 23

Court of Queen’s Bench of Alberta Citation: Meta4Hand Inc v Research In Motion Ltd, 2017 ABQB 23 Date: 20170113 Docket: 1203 11143 Registry: Edmonton Between: Meta4Hand Inc. Plaintiff/Respondent - and - Research in Motion Ltd. Defendant/Appellant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.M. Ross _______________________________________________________ Appeal from the Decision by S.L.

Schulz Q.C., Master in Chambers Dated the 20 th day of January, 2016 Introduction [ 1 ] This is an appeal from a Master’s decision dismissing the Appellant’s application to stay proceedings in Alberta on the basis that forum selection clauses governing the parties’ dispute designate Ontario as the proper forum. The Appellant argues the Master erred

in finding that the Respondent would suffer irreparable prejudice if the action were stayed in Alberta, and failed to give proper weight to the forum selection clause in making her decision. [ 2 ] The Respondent submits that its action should be allowed to proceed in Alberta due to the prejudice it would suffer as a consequence of the Appellant’s attornment to the jurisdiction of the Alberta courts and delay in bringing the stay application.

Standard of Review [ 3 ] An appeal from a Master’s decision is a hearing de novo , and the standard of review is correctness: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 , 524 AR 382 at para 30 ; Kulaga v First National Financial GP Corp , 2014 ABQB 400 , [2014] AJ No 694 (QL) at para 19 . [ 4 ] The Alberta Rules of Court , Alta Reg 124/2010, R 6.14(3) [ Rules ] provides that “[a]n appeal from a master’s judgment or order is an appeal on the record of proceedings before the master and may also be based on additional evidence that is, in the opinion of the judge hearing the appeal, relevant and material.” The term “relevant and material” has been interpreted broadly by the Alberta courts, making this a low threshold to meet: Bahcheli at para 16 .

It is for this reason that Master’s appeals are commonly referred to as “hearings de novo ”. [ 5 ] In this case, the record before me is the same as the record before the Master, with one notable exception. The Appellant has given an undertaking before the Court that, in the event they are successful in this application and the Respondent commences its action again in Ontario, it will treat that action as if it had been filed on the same day this action was initiated in the Alberta courts. This undertaking was not given before the Master.

This new undertaking was included in the Appellant’s brief and was confirmed by the Appellant’s counsel during oral argument, but it was not included in a new affidavit. While this is not “evidence” in the traditional sense, I find that this undertaking is relevant and material to the issue before this Court, and therefore may be considered. Background Facts [ 6 ] Research in Motion Inc., now known as Blackberry Inc. (hereafter referred to as “Blackberry”), is a large technology company incorporated in Ontario.

It develops software and hardware for its proprietary brand of smartphones and tablet computers, which are sold throughout Canada and internationally. Blackberry is not registered extra-provincially in Alberta. [ 7 ] Meta4Hand Inc. is a small technology company incorporated in Alberta. Meta4Hand pioneered the development of a means of establishing a wireless two-way communication connection between a primary device (such as a cell phone) and a wireless data transport system to connect a secondary device which displays the computer network data (the “Technology”).

Meta4Hand obtained a United States patent to protect its interest in intellectual property associated with the Technology on November 6, 2007.

In addition to the patent, Meta4Hand’s assets currently consist of computers, smartphones and demonstration gear stored at the home of Frank Wong, Meta4Hand’s corporate representative, in Edmonton. [ 8 ] In 2008, Meta4Hand joined the Blackberry Alliance Program (the “Program”), in which independent software vendors and developers pay an annual fee to Blackberry in exchange for being permitted to market compatible software programs directly to Blackberry for inclusion on Blackberry’s ecosystem of devices.

Other benefits of the Program include potential joint marketing opportunities, special pricing for Blackberry software licenses and test devices, access to Blackberry’s Software Development Kit and related resources, and support for sales and distribution. Meta4Hand wished to join the Program to market the Technology for potential inclusion on Blackberry’s devices. [ 9 ] Meta4Hand and Blackberry executed a Non-Disclosure Agreement (“NDA”) on July 11, 2007 and a Master Alliance Agreement (“Master Agreement”) on December 3, 2008, formally marking Meta4Hand’s admittance to the Program.

During negotiations between the parties on the Master Agreement, several representatives from Meta4Hand travelled to Ontario to meet with representatives from Blackberry to discuss details of Meta4Hand’s potential involvement in the Program. In an email sent by Mr. Wong to Blackberry on July 29, 2008, he confirmed that Meta4Hand was particularly concerned about retaining its ownership rights in the Technology, and ensuring that neither the Master Agreement nor the NDA transferred ownership rights in the Technology to Blackberry.

Clause 6.1 of the Master Agreement confirms that “neither Party will acquire any rights in or to any of the other Party’s Intellectual Property under this Agreement” except for intellectual property in joint developments between the parties, which are deemed to be owned solely by Blackberry.

Furthermore, Clause 6.3 confirms that each party “retains all right, title and interest, including, without limitation, Intellectual Property, in and to its products or services.” Meta4Hand’s corporate representative signed both of the agreements in Edmonton, while Blackberry’s representatives signed the agreements in Ontario. [ 10 ] Both the Master Agreement and the NDA contain choice of law and forum selection clauses.

Clause 17 of NDA provides: Governing Law. … Where the address of the Participant [Meta4Hand] is either not noted above or as noted above is not located in the territory of the United States, this Agreement shall be governed by and construed under the laws of the Province of Ontario, Canada.

Each Party hereto irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of the courts of the State of New York or the Province of Ontario as applicable.

The Parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement. [Emphasis added.] [ 11 ] Clause 12.4 of the Master Agreement contains a similar choice of law and forum selection provision: Governing Law. If the Territory is in the United States of America, this Agreement shall be governed by and construed under the laws

of the State of New York, otherwise it will be governed by and construed under the laws of the Province of Ontario. Each Party hereto irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of the courts located in the State of New York and the Province of Ontario, respectively. The Parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement.

In construing, interpreting and enforcing this Agreement, choice of law principles shall not apply. [Emphasis added.] [ 12 ] It is common ground between the parties that, since Meta4Hand is incorporated and operates exclusively in the Province of Alberta, the Province of Ontario would be the correct forum pursuant to the two forum selection clauses.

Litigation History [ 13 ] On July 26, 2012, Meta4Hand filed a Statement of Claim in the Court of Queen’s Bench of Alberta, alleging Blackberry breached both the Master Agreement and the NDA by misappropriating its intellectual property in the Technology and incorporating it into the Playbook, a new tablet computer Blackberry released on April 19, 2011. Meta4Hand alleges it never licensed its software for Blackberry’s use, nor was compensated for its use, causing Meta4Hand significant economic harm while unjustly enriching Blackberry.

It also alleged causes of action in unjust enrichment and wrongful interference with prospective economic advantage. [ 14 ] On August 3, 2012, Blackberry’s counsel (at that time, Miller Thomson LLP) sent a letter to Meta4Hand’s counsel requesting a courtesy extension of the filing deadline for the Statement of Defense. On August 24, 2012 Meta4Hand’s counsel sent a letter to Blackberry’s counsel asking to receive the Statement of Defense no later than September 7, 2012. [ 15 ] On August 27, 2012, Blackberry sent a Request for Particulars to Meta4Hand.

Meta4Hand responded to the Request for Particulars on April 24, 2013. [ 16 ] On June 3, 2013, Meta4Hand’s counsel emailed Blackberry’s counsel asking when Blackberry expected to file its Statement of Defense. Blackberry’s counsel replied that he would discuss this with Blackberry later that week, and would respond then with a realistic estimate.

On October 28, 2013, Meta4Hand’s counsel sent a letter to Blackberry’s counsel following up on the June 3 email exchange, and requested the Statement of Defense be filed by November 6, 2013. [ 17 ] Meta4Hand’s counsel emailed Blackberry’s counsel again on December 3, 2013 asking when a Statement of Defense would be filed, and indicating he wished to

schedule examinations for discovery in the spring of 2014. Blackberry’s counsel replied on December 5, 2013 that a draft Statement of Defense had been forwarded to Blackberry, and he would be in a position to file the Statement of Defense “quite shortly.” [ 18 ] On January 31, 2014, Meta4Hand sent a proposed litigation plan to Blackberry. On February 2, 2014, Meta4Hand’s counsel again emailed Blackberry’s counsel asking them to file and serve the Statement of Defense by February 10, 2014.

On February 4, 2014, Blackberry’s counsel left a voicemail message with Meta4Hand’s counsel indicating he could not meet the February 10 deadline because the Blackberry employee he was taking instructions from was out of town for two weeks. He indicated he “should be able to turn it around in a couple days” once the employee returned. [ 19 ] On February 28, 2014, Blackberry filed a Statement of Defense. The Statement of Defense responds to the substantive allegations raised in the Statement of Claim, denying liability in each case.

In addition, paragraph 3 of the Statement of Defense states: Blackberry proposes that this Action be tried in the Province of Ontario. In the NDA and Master Agreement … the Plaintiff, Meta4Hand … and Blackberry … consented to the jurisdiction of the Ontario Courts and irrevocably waived any objection on the grounds of venue, forum non-conveniens or any similar grounds. The NDA and the Master Agreement are also governed by, and to be construed under, the laws of the Province of Ontario. [ 20 ] On May 29, 2014, Meta4Hand served its affidavit of records on Blackberry.

On July 2, 2014, Blackberry’s counsel left a voicemail with Meta4Hand’s counsel confirming receipt of the affidavit of records and asked whether Meta4Hand wished to file a Reply to the Statement of Defense before Blackberry’s affidavit of records was produced. [ 21 ] On July 9, 2014, Blackberry changed its counsel to Gowling Lafleur Henderson LLP. That same day, Blackberry’s new counsel requested an extension to file Blackberry’s affidavit of records.

On September 18, 2014, Blackberry sent another email requesting particulars of certain emails referenced in the Statement of Claim to enable him to locate other relevant documentation in Blackberry’s possession. [ 22 ] On December 3, 2014, Blackberry changed its counsel again to Norton Rose Fulbright LLP. On February 17, 2015, Blackberry commenced the within stay application. [ 23 ] Mr. Wong filed an affidavit in support of Meta4Hand’s position with respect to the stay application on August 26, 2015. Mr. Wong was questioned on his affidavit on November 18, 2015.

He confirmed that, as of the date of questioning, Meta4Hand no longer had any employees. Most of Meta4Hand’s co-founders and the co-inventors of the Technology were no longer active in the company, although some remain available to provide services on a contract basis, principally to maintain Meta4Hand’s patents and intellectual property. In addition to asking questions relevant to the stay application, Blackberry’s counsel asked questions touching on the merits of the claim, including questions about how Meta4Hand’s trade secrets were allegedly conveyed to Blackberry. The Decision Below

[ 24 ] On January 20, 2016, the parties appeared before Master Schulz on Blackberry’s stay application.

Noting that both the Master Agreement and the NDA contained forum selection clauses, Master Schulz followed the test set in ZI Pompey Industrie v ECU-Line NV , 2003 SCC 27 , [2003] 1 SCR 450 [ Pompey ] and 1400467 Alberta Ltd v Adderley , 2014 ABQB 339 , 590 AR 84 [ Adderley ] to find that the forum selection clauses are of “primordial importance” in deciding the correct jurisdiction to hear the matter: if there is a choice of jurisdiction clause in a contract that is the major consideration to be looked at initially, such that it places the burden on the plaintiff to show that there are exceptional circumstances which … override the choice of law clause. [ 25 ] The Master found that Blackberry attorned to the jurisdiction of the Alberta courts when it defended the action on its merits and requested particulars from Meta4Hand relevant to the substantive allegations raised.

However, she found that “attornment alone is not sufficient to be an exceptional circumstance” to override the forum selection clauses. [ 26 ] Master Schulz accepted Meta4Hand’s representation that the limitation period expired shortly before Blackberry filed its Statement of Defense, which would effectively prevent it from bringing an action in Ontario if a stay were granted in Alberta. Master Schulz found that, in order to constitute an “exceptional circumstance”, the plaintiff must suffer prejudice or a loss of juridical advantage if the stay is granted.

She found that the expiry of the limitation period constituted prejudice “that is sufficient to bring it within the definition of an exceptional circumstance,” and on that basis dismissed the stay application. In addition, she found that related tort claims should be tried in the same jurisdiction as the breach of contract claim, citing the Supreme Court’s decision in Club Resorts Ltd v Van Breda , 2012 SCC 17 , [2012] 1 SCR 572 [ Club Resorts ]. Further, the Master ordered the parties to enter into a standard case management plan to allow the action to proceed more expeditiously in the Alberta courts.

Issues [ 27 ] The parties agree that the NDA and the Master Agreement were properly executed and contain forum selection clauses designating the Ontario courts as the proper forum to hear disputes arising out of the contracts.

According to Pompey at para 21 , the presence of forum selection clauses shifts the onus to the party opposing the stay to demonstrate that the forum selection clauses should not apply in the circumstances: ...the presence of a forum selection clause ... is, in my view, sufficiently important to warrant a different test, one where the starting point is that parties should be held to their bargain, and where the plaintiff has the burden of showing why a stay should not be granted. ...

In my view, a separate approach to applications for a stay of proceedings involving forum selection clauses in bills of lading ensures that these considerations are properly taken into account and that the parties' agreement is given effect in all but exceptional circumstances. [ 28 ] Therefore, the main issue on appeal is whether Meta4Hand has met its burden to demonstrate that exceptional circumstances exist to displace the forum selection clauses and continue the matter in Alberta. A corollary issue raised by the parties is whether the related causes of action should follow the contract claims.

Parties’ Positions a. Blackberry [ 29 ] Blackberry argues that the parties expressly agreed that Ontario is the proper forum to hear disputes arising from the contracts. It contends that no exceptional circumstances exist warranting a departure from the agreements between the parties, and Meta4Hand breached the express terms of the NDA and the Master Agreement when it filed its action in Alberta. [ 30 ] Blackberry argues the Master erred in accepting Meta4Hand’s submission that the limitation period expired subsequent to the filing of the Statement of Claim but before the filing of the Statement of Defense.

Rather, Blackberry argues that the limitation period expired before the Statement of Claim was filed. Further, as noted above, Blackberry is prepared to provide an undertaking to the court that, if a stay is granted in Alberta and Meta4Hand files a Statement of Claim in Ontario, Blackberry will not seek to defeat the Ontario claim on the basis that the limitation period expired subsequent to July 26, 2012, when the Statement of Claim was filed in Alberta. This would put Meta4Hand in the same position it would have been in if it had filed its Statement of Claim in Ontario, and not Alberta.

Blackberry would continue to be free to raise a limitation defense on the basis that the period expired before July 26, 2012. This is a new concession that was not made before Master Schulz, and appears to be designed to respond to the Master’s principal concern that the expiry of the limitations period would prevent Meta4Hand from proceeding with its claim in Ontario if a stay were granted in Alberta. [ 31 ] In the alternative, Blackberry argues that Alberta lacks jurisdiction and is not a forum conveniens .

Blackberry denies it has attorned to the jurisdiction of the Alberta courts since it contested jurisdiction from the outset in the Statement of Defense. Further, Blackberry argues that none of the presumptive connecting factors are present to establish Alberta as a forum conveniens : Blackberry is not resident in Alberta, nor does it maintain an office in Alberta or carry on business in Alberta; the agreements were made in Ontario; and any alleged misappropriation in breach of the agreements was not committed in Alberta. b.

Meta4Hand [ 32 ] Meta4Hand argues Master Schulz correctly dismissed Blackberry’s stay application. Meta4Hand argues Blackberry attorned to the jurisdiction of the Alberta courts when it defended the claim on its merits. Blackberry’s attornment was further substantiated by filing a Request for Particulars and communicating that it intended to defend the action, proceed with questioning, file its own Affidavit of Records, and discuss a litigation plan. Meta4Hand also notes that, during Blackberry’s questioning on Mr.

Wong’s affidavit, it went beyond asking questions relevant to the jurisdiction issue and extended to questions touching on the merits of the claim. Meta4Hand claims that Blackberry’s litigation conduct led it to reasonably believe that Blackberry intended to proceed with the litigation in Alberta,

and granting a stay at this stage in the proceedings would be prejudicial to Meta4Hand, even in light of Blackberry’s new undertaking not to rely on a limitations defence that arose after the filing of the Alberta Statement of Claim. [ 33 ] Meta4Hand argues that Alberta has jurisdiction, based on attornment and a real and substantial connection with the claims advanced, and that it is a forum conveniens . Meta4Hand contends Blackberry carried on business in Alberta when it sold its products, employed salespeople, and scouted potential third-party developers in Alberta.

With respect to contract formation, Meta4Hand contends the contracts were both formed in Alberta once Meta4Hand accepted the offer set out in the contracts sent by Blackberry to Meta4Hand’s office in Edmonton. Meta4Hand also argues that the contract was performed in Alberta through the development of technologies for Blackberry’s later review. Lastly, Meta4Hand contends that the tort and equitable claims advanced in the action are connected to Alberta.

Meta4Hand argues that the contract claims should be tried concurrently with the tort and equitable claims in Alberta, to give effect to the principles of efficiency and judicial economy. [ 34 ] Lastly, in the event this action proceeds in Alberta, Meta4Hand requests this court’s assistance to implement a litigation plan to avoid further procedural delays. The Law a.

Effect of Attornment [ 35 ] If a party attorns, or consents to submit to the jurisdiction of the Court, the Court has jurisdiction to hear the matter: Club Resorts at para 79 : Momentous.ca Corp v Canadian American Association of Professional Baseball Ltd , 2010 ONCA 722 , 103 OR (3d) 467 at para 35 [ Momentous.ca ]. [ 36 ] While attornment founds consent-based jurisdiction, it is not determinative of whether the court should exercise that jurisdiction.

The Court must then decide whether it should exercise jurisdiction based either on a forum conveniens analysis or on the “strong cause” test established in Pompey : Momentous.ca at paras 36-39 . [ 37 ] It is well established that when a party defends a lawsuit on the merits, it has implicitly submitted or attorned to the jurisdiction: Bansal v Ferrara Pan Candy Co Inc , 2014 ABQB 384 , 55 CPC (7th) 386 at para 16 . b. The “Strong Cause” Test [ 38 ] The decision of the Supreme Court of Canada in Pompey , supra is the leading authority on the application of forum selection clauses.

In that case, cargo originating in Belgium was damaged in Canada while in transit by rail to the purchaser in Seattle. The action was commenced in the Federal Court of Canada, but jurisdiction was contested on the basis of a forum selection clause in the bill of lading, which designated the courts in Antwerp, Belgium as the exclusive forum to hear disputes arising from or connected to the contract.

The Court held that the “strong cause” test should apply when the agreement between the parties contains a forum selection clause (at para 20): In the context of international commerce, order and fairness have been achieved at least in part by application of the “strong cause” test. This test rightly imposes the burden on the plaintiff to satisfy the court that there is good reason it should not be bound by the forum selection clause. It is essential that courts give full weight to the desirability of holding contracting parties to their agreements.

There is no reason to consider forum selection clauses to be non-responsibility clauses in disguise. In any event, the “strong cause” test provides sufficient leeway for judges to take improper motives into consideration in relevant cases and prevent defendants from relying on forum selection clauses to gain an unfair procedural advantage. [ 39 ] This approach is distinct from the forum conveniens test, where the burden is on the applicant for a stay to show that there is a clearly more appropriate forum.

Instead, if the written agreement contains a clear and unambiguous forum selection clause designating another jurisdiction as the correct forum to hear disputes, the burden shifts to the respondent to show that a “strong cause” or “exceptional circumstance” exists to deny the stay: Pompey at para 21 .

It is for this reason that Veit J. in Adderley , supra found that forum selection clauses are given “primordial importance” when choosing the correct forum: at para 5. [ 40 ] The Court must take into account all relevant circumstances and issues arising under a contract to determine whether a strong cause exists to depart from the forum selection clause: Pompey at para 30 .

In Expedition Helicopters Inc v Honeywell Inc , 2010 ONCA 351 , 100 OR (3d) 241 [ Expedition Helicopters ], the Ontario Court of Appeal set out a non-exhausive list of potential situations where a Court could decline to enforce a forum selection clause due to the presence of exceptional circumstances (at para 24): A forum selection clause in a commercial contract should be given effect. The factors that may justify departure from that general principle are few.

The few factors that might be considered include the plaintiff was induced to agree to the clause by fraud or improper inducement or the contract is otherwise unenforceable, the court in the selected forum does not accept jurisdiction or otherwise is unable to deal with the claim, the claim or the circumstances that have arisen are outside of what was reasonably contemplated by the parties when they agreed to the clause, the plaintiff can no longer expect a fair trial in the selected forum due to subsequent events that could not have been reasonably anticipated, or enforcing the clause in the particular case would frustrate some clear public policy.

Apart from circumstances such as these, a forum selection clause in a commercial contract should be enforced. [ 41 ] The Court also held that the inconvenience suffered by the plaintiff in having to re-initiate its lawsuit in another jurisdiction does not amount to a strong cause sufficient to override the application of a forum selection clause: at para 23. [ 42 ] In BTR Global Opportunity Trading Ltd v RBC Dexia Investor Services Trust , 2011 ONCA 518 , [2011] OJ No 3250 (QL) the Ontario Court of Appeal confirmed that the list of “exceptional circumstances” set out in Expedition Helicopters is not closed.

Courts may consider “[f]actors pertaining to justice or reasonableness” to identify other applicable exceptional circumstances: at para 8.

c. “Inordinate Delay” as an Exceptional Circumstance [43] “Inordinate delay” was held to constitute an exceptional circumstance in Mobile Mini Inc v Centreline Equipment RentalsLtd (2004), (ON CA), 190 OAC 149, [2004] OJ No 3659 (QL) (Ont CA) [Mobile Mini]. In that case, Mobile Miniinitiated the action in Ontario, and the forum selection clause granted exclusive jurisdiction to the courts in Arizona to hear disputesarising out of the contract.

Centreline filed its stay application three and a half years after the statement of claim was filed, two and a halfyears after Centreline became aware of the forum selection clause, and just before the parties were scheduled to go to trial. Centrelinecompleted many procedural steps before filing its stay application, including filing a statement of defense, commencing a counterclaim,filing an affidavit of records, and examining Mobile Mini’s corporate representative for discovery.

The Court acknowledged, “had thismotion been brought at the outset of the proceedings in Ontario, those proceedings would have been stayed in favour of proceedings inArizona”: at para 7. However, the Court concluded that “we think it would be unjust to require the appellant to stop the proceedings inOntario on the eve of trial and move them to Arizona to begin the proceedings afresh some three and a half years after the statement ofclaim was issued”: at para 9.

In obiter, the Court noted that Ontario was the more appropriate forum following the conventional forumconveniens analysis, but recognized this alone does not trump the forum selection clause (at para 10): We also note that the litigation is more closely tied to Ontario than Arizona. Most of the witnesses reside in Ontario, most of thedocuments are found in Ontario, and all of the relevant events occurred in Ontario.

While the close connection between Ontario and thesubject matter of the litigation would not by itself trump the forum selection clause, it does make it easier to come to the conclusion thatgiven the delay and the defendant’s conduct in the proceedings, justice requires that the Ontario proceedings continue. [44] In Sault College of Applied Arts and Technology v Agresso Corp, 2007 ONCA 525, [2007] OJ No 2672 (QL) [SaultCollege], the Ontario Court of Appeal followed Mobile Mini to decline to enforce a forum selection clause due to the exceptionalcircumstance of inordinate delay.

The forum selection clause selected British Columbia as the appropriate forum to hear all disputes, andrequired the parties to submit to arbitration under British Columbia’s Commercial Arbitration Act. The plaintiffs commenced their actionin Ontario. In that case, the delay was two years, as opposed to three and a half in Mobile Mini.

Despite the shorter delay, the Courtdeclined to enter a stay in the face of a forum selection clause because the matter was ready to proceed to trial at the time the stayapplication was filed: at para 10. [45] In an obiter comment in Adderley at para 5, Veit J. found that an exceptional circumstance may exist where inordinate delayoccurs in bringing the stay application, and during that delay the defendant attorns to the jurisdiction and takes “many” litigation stepsbefore commencing its stay application.

She observed that all of these factors were present in Mobile Mini, and I note they were alsopresent in Sault College. Veit J. noted that these additional facts “might be thought by some to weaken the strength of inordinate delay,standing alone, as an exceptional circumstance”: at para 40. d.

Waiving the Limitations Period [46] In previous cases where one party successfully stayed proceedings in the original jurisdiction to allow the matter to proceed ina more appropriate forum, courts have recognized agreements to treat the commencement of the proceedings in the other forum as if ithad begun on the date when the action was initiated in the original forum.

This has been held to be sufficient to mitigate any resultingprejudice to the plaintiff on account of the limitations period expiring after filing its action in the original jurisdiction: Nova ChemicalsCorp v Ace Ina Insurance, 2004 ABQB 318, [2004] AJ No 503 (QL) at para 17; Jean-Jacques v Jarjoura, [1996] OJ No 5174 (QL)(Ont Ct J (Gen Div)) at para 17; Rogers v Bank of Montreal, (BC SC), 40 BCLR 129, [1982] BCJ No 1773 (QL)(BCCA) at para 36. Analysis [47] Blackberry filed a statement of defense engaging the merits of Meta4Hand’s claim.

I agree with the Master and Meta4Handthat Blackberry attorned to the jurisdiction of the Alberta courts. The Court has consent-based jurisdiction over the action. [48] The issue is whether the Court should exercise that jurisdiction. As the parties are bound by forum selection clauses, thatissue is determined by the strong cause test.

The issue on appeal is whether Meta4Hand has met its burden to demonstrate thatexceptional circumstances exist to displace the forum selection clauses. [49] I agree with the Master and with the Ontario Court of Appeal that attornment without more is insufficient to constitute strongcause to override the forum selection clauses: Momentous.ca at paras 44-45. [50] Similarly, delay per se does not constitute strong cause. Delay giving rise to irreparable prejudice, as the Master found, wouldconstitute strong cause.

However, Blackberry’s undertaking to waive limitations defences arising after the commencement of the Albertaaction eliminates this potential prejudice to Meta4Hand. [51] In the absence of irreparable prejudice, the combination of inordinate delay, attornment and the completion of multiplelitigation steps was found to amount to exceptional circumstances in Mobile Mini and Sault College. [52] In this case, there was inordinate delay by Blackberry in bringing this stay application. Blackberry filed its statement ofdefense 19 months after the statement of claim. This was the first time it contested jurisdiction.

It then took another year before the stayapplication was commenced. [53] Some delay can be attributed to Meta4Hand, such as the eight-month delay between when Blackberry served its Request forParticulars and Meta4Hand’s Reply, but most of the delay was caused by Blackberry. Blackberry did not need to request particulars,which related to the merits of the claim, or defend on the merits, given its intention to rely on the choice of forum clauses. There werealso multiple requests for extensions and missed deadlines by Blackberry, both before and after the filing of the Statement of Defence.

[54] The delay in commencement of the stay application, almost 31 months after the Statement of Claim was filed, is similar to thedelay in Mobile Mini and longer than in Sault College. [55] The delay is inordinate in length, and no justification for it has been offered. However, as noted by Veit J. in Adderley, thecases suggest that inordinate delay alone does not constitute an exceptional circumstance warranting departure from a forum selectionclause. I must also consider how advanced the litigation is. [56] Despite the time that has passed, the litigation is not very advanced.

Apart from the completion of pleadings, the only steptaken towards trial readiness is the filing of an affidavit of records by the Plaintiff. The Defendant’s affidavit of records has not beenfiled, and questioning has not commenced. These very significant steps remain before the matter will be ready for trial, in either Albertaor Ontario. [57] Unlike Mobile Mini and Sault College, the litigation has not progressed to the stage of trial readiness.

It would be incorrect tosay that “many” litigation steps have been taken, as Adderley suggests is necessary to constitute an exceptional circumstance. [58] I find that exceptional circumstances do not exist to warrant a departure from the forum selection clauses because thelitigation has not advanced to the point that entering a stay would cause significant prejudice to Meta4Hand. Since I have found that theforum selection clauses should be enforced, it is unnecessary for me to proceed with a forum conveniens analysis.

Related Claims [59] Generally, related claims should be tried in the same forum as the contract claims. This helps improve judicial economy, andprevents the possibility of inconsistent results.

If the forum selection clause is worded broadly to include claims “arising out of” orrelated to the contract claim, then the forum selection clause will also apply to those related claims: Crown Resources Corp v NationalIranian Oil Co, (ON CA), 273 DLR (4th) 65, [2006] OJ No 3345 (QL) (Ont CA) at paras 33-34 [CrownResources]; Sarabia v Oceanic Mindoro (The), (BC CA), 26 BCLR (3d) 143, 84 BCAC 8 (BCCA) at para 25[Sarabia]; Scalas Fashions Ltd v Yorkton Securities Inc, 2003 BCCA 366, 17 BCLR (4th) 6 at para 34. [60] In ZI Corp v Steinberg, 2006 ABQB 92, 396 AR 157 at paras 20-21 [Steinberg], Wittmann ACJ (as he then was) cited severalacademic authorities with approval which suggested that courts should not parse the specific wording of forum selection clauses todetermine if related claims are included in the specific language used.

Rather, all claims that arise out of contractual relationships shouldpresumptively be tried in the same jurisdiction as the contract claim unless specific language to the contrary is included, or if it would beunreasonable to interpret the clause to cover related claims: 20 In Dicey and Morris on The Conflict of Laws, 13th ed. (London: Sweet & Maxwell, 2000) the authors state at para. 12-080: Where the jurisdiction agreement is governed by English law, the court may presume the agreement was intended to apply to all disputesarising between the parties which are connected with the contract in which the agreement was contained. 21 Castel and Walker, in Canadian Conflict of Laws, 6th ed. (Markham, Ont.: Butterworths, 2005) similarly observe at p. 13-57: Parsing jurisdiction clauses to determine whether they apply to claims as they are framed could foster dubious efforts to evade legitimateagreements for dispute resolution, which can be of considerable significance in international commercial dealings.

Where a duty of carein tort, or a fiduciary duty which is alleged to have been breached has arisen in a contractual relationship that is subject to an agreementcontaining a jurisdiction clause, the clause should be applied unless it contains language that clearly excludes the dispute or it can not beinterpreted so as to cover the dispute. [61] The broader approach suggested by the academic authorities cited in Steinberg gives effect to the general principles ofimproving judicial economy and preventing the possibility of inconsistent results.

Therefore, if a contract is governed by a forumselection clause, then related claims are presumptively included in the ambit of the forum selection clause unless express language to thecontrary is included, or if it would be unreasonable to interpret the clause to cover related claims. [62] Other claims are “related” to the contract claims if they would not have arisen in the absence of the contractual relationship.For example, in Sarabia, the tort claims were found to be related to the contract claim because “in the absence of the ... contract, therespondent and the appellants would not be neighbours”: at para 30.

Similarly, in Crown Resources, the tort and breach of fiduciary dutyclaims were found to be “so intertwined with the contract” that it was necessary to hear all of the actions together in the same forum: atpara 34. [63] In this case, the claims in unjust enrichment and intentional interference with prospective economic advantage are related tothe breach of contract claim. Since the forum selection clauses mandate the contract claim must proceed in Ontario, then the relatedclaims must also be tried in Ontario.

Therefore, I order that all of Meta4Hand’s claims, including the related claims, be stayed in Albertato allow them to proceed in Ontario. Costs [64] The Alberta Rules of Court, R 10.29 provides that, as a general rule, the successful party to an application is entitled to costsfrom the unsuccessful party. However, the Court has discretion to depart from the general rule.

The Rules of Court, R 10.33(2)(a)confirms that a Court may “impose, deny or vary an amount in a costs award,” taking into account “the conduct of a party that wasunnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action.” [65] In Koppe v Garneau Lofts Inc, 2005 ABQB 727, 385 AR 265 [Koppe], Slatter J. (as he then was) reviewed the case law

surrounding what constitutes “thrown-away costs” and set out general principles at paras 18, 20, 22 and 23: 18 The general pattern in these cases is that when a party makes a procedural misstep, that party will then assert to the respondent that it has the right to correct that misstep if it eliminates all the prejudice. For example, it may assert that it has the right to amend a defective pleading, on payment of the costs of any wasted effort by the respondent.

It might assert a right to open up a noting in default, because it has met the legal test for doing that (supra, para. 7(b)), again on payment of wasted costs. The respondent can do one of two things: it can acknowledge that the applicant has the right to fix the misstep, because the applicable test has been met, including that any prejudice can be eliminated on appropriate terms, or it can deny that the applicant has the right to correct the misstep. In the latter situation, a new sub- dispute is created.

There is now an issue as to whether the appropriate test (e.g. to amend, to adjourn, to open up noting in default, etc.) has been met. When this issue is litigated, the general rule should be that costs follow the event, subject of course to the Court's general jurisdiction over costs. Granting costs to an unsuccessful party only encourages unreasonable opposition to relief to which the applicant is entitled. ... 20 Likewise, if a party is noted in default, but asserts that it has met the test for opening up a default, it should be entitled to costs if successful.

If the respondent denies that the defaulting party has the right to open up the default, and forces the matter to Chambers, then costs should follow the event. Again, it would be an undesirable result to allow respondents to defend such applications regardless of the merits of the applicant's position.

The applicant may have caused the noting in default, but it did not cause the subsequent court battle about whether it was entitled to open up the noting in default. ... 22 It should be noted that in these situations the costs of determining whether the applicant is entitled to be relieved of its procedural misstep is not really "wasted". There is a dispute over the rights of the applicant to relief from its error, and the application resolves that dispute. Those efforts are not "wasted", because the dispute must be resolved.

Furthermore, those proceedings are not a direct result of the procedural misstep of the applicant; they are really brought on by the respondent's failure to accept that the applicant has made out its right to be relieved of the consequence of its procedural misstep. Where the applicant is entitled to relief the respondent should not unreasonably litigate the point. As a result, the rule that costs go to the successful party (Rule 607) should prevail over any rule about "wasted" costs. 23 In

summary, a distinction should be drawn between: (

a) the costs of the wasted work caused by the procedural misstep that is the source of the problem, and (

b) litigating the dispute over whether the person who took the misstep has the right to fix it. The principle that the Rules are prejudice-based, and that procedural errors should be forgiven if prejudice can be eliminated, must be balanced against the other rule that costs generally go to the successful party: Rule 607. Subject to the overriding discretion of the judge over costs, only the first category of costs (paragraph (a)) are "thrown away". [ 66 ] I view Blackberry’s inordinate delay in commencing the stay application as a procedural misstep.

While it was not sufficient to constitute an extraordinary circumstance justifying departure from the choice of forum clauses, it was unjustified and caused harm in the form of thrown away costs to Meta4Hand. In particular, Meta4Hand incurred thrown away costs in replying to Blackberry’s Request for Particulars and filing an affidavit of records. These steps were taken in Alberta only because of Blackberry’s unjustifiable delay. [ 67 ] Blackberry argues that Meta4Hand will benefit from the work done in Alberta when the matter is initiated in Ontario.

In my view, any such benefit will be outweighed by the cost to Meta4Hand involved in having new counsel in Ontario become familiar with the action, in order to replicate steps unnecessarily taken in Alberta. [ 68 ] Meta4Hand argues it should receive solicitor and client costs, because of Blackberry’s delays in commencing the stay application, and its further delay in providing an undertaking to waive limitation defences only when it filed submissions on the appeal of the Master’s decision.

While I regard both of these delays as missteps that justify costs consequences, they do not in my view amount to the type of misconduct that calls for an award of solicitor and client costs. They do not constitute “positive, deliberate misconduct” that is “intended to deceive the court, defeat justice, hinder the proceeding, or harm the [opposing party]”: Malton v Attia , 2016 ABCA 130 , 35 Alta LR (6th) 27 at para 67 . [ 69 ] While solicitor and client costs are not justified, I do view the circumstances as providing justification for an adjustment to costs provided in

Schedule C. I am awarding costs to Meta4Hand in Column 5, even though Meta4Hand has not established a right to recovery of over $1.5 million. For the work taken in relation to the Reply to Request for Particulars, Meta4Hand is entitled to the full amount provided in paragraph 1(1) of the tariff for “commencement documents, affidavits, pleadings and related documents, and amendments”.

This adjustment is also required by the complexity of the claim and the fact that the tariff amount was set in 2003. [ 70 ] For the affidavit of records, Meta4Hand is awarded the Column 5 amount of $1500. [ 71 ] The Master awarded $1000 in costs to Meta4Hand in the application below. Normally, a successful appellant is entitled to its costs for the appeal, and if the lower court’s judgment is completely reversed, the appellate court may revisit and modify the lower court’s costs award: MacPhail v Karasek , 2006 ABCA 354 , 401 AR 100 at paras 7-8 ; Vallieres v Vozniak , 2014 ABCA 384 , 588 AR 17 at para 6 .

Again, the Court has discretion to depart from these general rules. [ 72 ] I have made it clear that I regard Blackberry’s delay in bringing the stay application as deserving of costs consequences. I have the same view with regard to Blackberry’s late offer of an undertaking to eliminate prejudice to Meta4Hand by treating a re-filed Ontario action as if it had been filed on the day this action was filed in Alberta. The Master’s decision was largely based on her finding that Meta4Hand might be time-barred from initiating its claim in Ontario, causing irreparable prejudice and constituting an exceptional

circumstance. Had Blackberry offered the same undertaking before the Master, the Master’s decision may well have been different. In my view it is likely that Blackberry’s litigation conduct necessitated this appeal, leading to further delay of the action and increased costs for Meta4Hand. Therefore, I have concluded that it is not only appropriate to deny Blackberry costs of the appeal, I will also not change the award of costs against Blackberry for the proceeding before the Master, in the amount of $1000.

However, keeping in mind Slatter J.’s comments in Koppe , Meta4Hand is not entitled to costs of the appeal. [ 73 ] In sum, Blackberry must pay costs to Meta4Hand in the amount of $6000. Disposition The appeal is granted. Meta4Hand’s action in Alberta is stayed. If Meta4Hand does not re-file its action in Ontario within 90 days of this decision, then Blackberry will be relieved from its undertaking to treat the action as if it was filed on July 26, 2012. Blackberry is to pay $6000 in costs to Meta4Hand forthwith.

Heard on the 4 th day of November, 2016; supplemental written submissions filed on November 18 th , 2016 and December 2 nd , 2016. Dated at the City of Edmonton, Alberta this 13 th day of January, 2017. J.M. Ross J.C.Q.B.A. Appearances: Eugene Bodnar and Val Naranjo Norten Rose Fulbright Canada LLP for the Appellant Karen A. Smith and Andrea M. Loft Parlee McLaws LLP for the Respondent