VM Agritech Limited v. Smith, 2024 BCCA 39

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: VM Agritech Limited v. Smith, 2024 BCCA 39 Date: 20240129 Docket: CA49535 Between: VM Agritech Limited (formerly Myco Sciences Limited) and Christopher J. Wightman Appellants (Defendants) And Alan Gilbert Smith Respondent (Plaintiff) Before: The Honourable Mr. Justice Hunter (In Chambers) On appeal from: An order of the Supreme Court of British Columbia, dated November 7, 2023 ( Smith v. VM Agritech Limited , Vancouver Docket S230800). Oral Reasons for Judgment Counsel for the Appellants: M.L. Ross N.D. Galanopoulos The Respondent, appearing in person: A.G.

Smith Place and Date of Hearing: Vancouver, British Columbia January 29, 2024 Place and Date of Judgment: Vancouver, British Columbia January 29, 2024

Summary: The applicants seek leave to appeal the order of a chambers judge dismissing an application to extend the time to bring a jurisdictional objection to the litigation and holding that the British Columbia Supreme Court has jurisdiction over them in respect of the claim and that they have attorned to the jurisdiction of the Court. Held: The orders that the British Columbia Supreme Court has jurisdiction over the applicants and that they have attorned to the jurisdiction of the Court are not limited appeal orders and do not require leave to appeal.

The order refusing to extend the time to bring the jurisdictional application is a limited appeal order, but is so intimately linked with the appeals that will proceed as of right that the interests of justice favour the appeals proceeding together.

Accordingly, leave to appeal is granted for the extension of time order. [ 1 ] HUNTER J.A. : This application concerns a civil action commenced by a British Columbia resident against a company incorporated in the United Kingdom and a resident of the United Kingdom. [ 2 ] The applicants, defendants in the underlying litigation, apply for leave to appeal a decision of a chambers judge dismissing an application to extend the time to bring a jurisdictional objection to the litigation and holding that the British Columbia Supreme Court has jurisdiction over them in respect of the claim and that they have attorned to the jurisdiction of the Court. [ 3 ] The application raises the question as to the appropriate approach to seek leave to appeal an order, part of which is a limited appeal order and part of which is not.

Background [ 4 ] The plaintiff, Mr. Gilbert Smith, resides in Vancouver. He is a shareholder of Voice Mobility International Inc. (“Voice”), which is a company headquartered in Vancouver.

[ 5 ] The defendant, Mr. Wightman, is the Chairman of the board of directors of the corporate defendant VM Agritech Limited (“VMAL”), which is a company incorporated in the United Kingdom (“UK”). Mr. Wightman resides in the UK and VMAL’s registered address is also in the UK. [ 6 ] In 2020, VMAL and Voice entered into a series of agreements concerning VMAL’s acquisition of Voice, with the intention of taking VMAL public through Voice’s public listing (the “VMAL–Voice Agreements”). On June 30, 2021, the last of the VMAL–Voice Agreements terminated without the transaction closing. [ 7 ] On February 1, 2023, Mr.

Smith filed the underlying Notice of Civil Claim (“Claim”). The Claim sought judgment in the amount of $24,155.91 from the applicants on the basis that VMAL had retained, or caused Voice to retain, the Vancouver office of the law firm Cassels Brock to provide legal services for the VMAL–Voice Agreements, that VMAL had failed to pay invoices for legal services totaling $24,155.91, and that Mr.

Smith had paid $12,000 to Cassels Brock in exchange for an assignment of the debt. [ 8 ] The applicants dispute the jurisdiction of the British Columbia Supreme Court over them in respect of this claim. [ 9 ] Rule 21-8 of the Supreme Court Civil Rules, B.C. Reg. 168/2009 contains a prescribed procedure to enable a defendant to raise a jurisdictional objection to a civil claim without attorning to the jurisdiction of the Court. First, the defendant must file a jurisdictional response in Form 108, which the applicants have done.

After doing so, the defendants may apply for an order setting aside the Notice of Civil Claim or service of the Notice of Civil Claim: Rule 21-8(3). If the application is brought within 30 days after filing a jurisdictional response, the rules provide that “the party does not submit to the jurisdiction of the court in relation to the proceeding merely by filing or serving … a notice of application and supporting affidavits under subrule (1)(

a) or (b)”: Rule 21-8(5)(a)(iii). Subrule (

b) is the subrule that authorizes an application to dismiss or stay a proceeding on the ground that the court does not have jurisdiction over that party in respect of the claim. [ 10 ] The rules are silent as to the effect on attornment of filing a jurisdictional application outside the 30-day window following the filing of a jurisdictional response. [ 11 ] On February 21, 2023, the applicants filed and served a jurisdictional response under Rule 21-8 disputing that the court had jurisdiction over them.

The applicants filed and served a notice of application seeking orders under Rule 21-8(3) setting aside service of the Claim. On May 2, 2023, a chambers judge set aside service of the Claim: 2023 BCSC 729 . [ 12 ] On May 9, 2023, Mr. Smith purportedly served the Claim on the applicants again, by having the Claim delivered to the home of Mr.

John Thompson, the Finance Director of VMAL. [ 13 ] On June 26, 2023, the applicants filed and served a second jurisdictional response under Rule 21-8 and on August 2, 2023, the applicants filed and served a second notice of application seeking orders setting aside service of the Claim under Rule 21-8(3)(

b) as having been improperly served. The applicants also sought an order dismissing or staying the proceedings under Rule 21-8(1)(

b) for want of jurisdiction over the applicants. The notice of application was filed five days outside the 30-day deadline stipulated by Rule 21- 8(5), and the applicants also sought an order extending the time in which to file their Rule 21-8 application to August 2, 2023, in order to attract the protections afforded by Rule 21-8(5), namely that their application would not be taken to constitute submission to the jurisdiction of the court. The Chambers Judgment [ 14 ] The application was heard in chambers on November 7, 2023 and oral reasons were delivered by the chambers judge the same day: Smith v.

VM Agritech Limited (7 November 2023), Vancouver S230800 (B.C.S.C.). [ 15 ] The chambers judge held that the service of the Claim was defective. That decision, favourable to the applicants, has not been challenged on appeal. [ 16 ] The chambers judge declined to dismiss or stay the proceedings on jurisdictional grounds. He noted that there were several factors connecting the proceeding to British Columbia, namely that the plaintiff is a resident of British Columbia, Voice is headquartered in British Columbia, and the Cassels Brock office retained is located in British Columbia.

In the judge’s words, “[i]t seems abundantly clear to me that there is a substantial connection between the claim of the plaintiff and the jurisdiction of British Columbia”: at para. 17. Additionally, the chambers judge characterized VMAL and Mr. Wightman’s jurisdictional challenge as relying on arguments concerning the ultimate merits of the claim, rather than the jurisdictional facts. [ 17 ] The chambers judge also dismissed VMAL and Mr. Wightman’s application for an order extending the time to serve their notice of application. In the chambers judge’s view, the reasons proffered by Mr.

Wightman to explain the delay—that he was traveling on business and lives in a remote area that makes it difficult for him to swear an affidavit—were “not very compelling”. The chambers judge noted that it was open to VMAL and Mr. Wightman to seek an extension of time beforehand and their decision not to do so was unexplained. The effect of this decision was that the applicants’ application fell outside 30 days after filing a jurisdictional response. [ 18 ] The result, in the chambers judge’s view, was that by filing the notice of application, VMAL and Mr.

Wightman had attorned to the jurisdiction of the British Columbia Supreme Court. The judge referenced Litecubes, L.L.C. v. Northern Light Products Inc., 2009 BCSC 181 at paras. 40–41 for the principle that attornment to the jurisdiction of a foreign court occurs as soon as the party asks the foreign court to make any decision on the merits, other than a decision determining jurisdiction. The chambers judge concluded that because VMAL and Mr. Wightman had attorned to the jurisdiction of the court, there was no need for Mr. Smith to re-serve the Claim. [ 19 ] VMAL and Mr.

Wightman wish to appeal from: 1) the order dismissing their application under Rule 21-8(1)(

b) for a dismissal or stay of the proceeding on the ground that the court does not have jurisdiction over the defendants in respect of the claim made against them;

2) the order dismissing their application under Rule 21-8(4)(

b) and (

c) and Rule 22-4(2) to extend the time to serve their notice of application from July 26 to August 2, 2023; and 3) the order that the defendants have attorned to the court’s jurisdiction. [ 20 ] An appeal can be brought as of right from an order of the Supreme Court, but if the order is a limited appeal order, leave from a justice is required: s. 13 of the Court of Appeal Act , S.B.C. 2021, c. 6 . Limited appeal orders are defined in Rule 11 of the Court of Appeal Rules . An order refusing an extension of time is a limited appeal order, pursuant to Rule 11(

e) of the Rules . Thus, this order cannot be appealed unless leave is granted. However, an order that the court has jurisdiction over a party is not a limited appeal order, and can be appealed as of right. Similarly, an order that a party has attorned to the jurisdiction of the court is not a limited appeal order. [ 21 ] Thus, the order sought to be appealed has three elements, two of which may be appealed as of right, and one of which requires leave to appeal. [ 22 ] The test for granting leave to appeal is well-established. The relevant criteria were set out in Goldman, Sachs & Co. v.

Sessions, 2000 BCCA 326 (Chambers): [10] The criteria for leave to appeal are well known. As stated in Power Consolidated (China) Pulp Inc. v. B.C.

Resources Investment Corp . (1988), 19 C.P.C. (3d) 396 (C.A.) they include: (1) whether the point on appeal is of significance to the practice; (2) whether the point raised is of significance to the action itself; (3) whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and (4) whether the appeal will unduly hinder the progress of the action. [ 23 ] These criteria are “all considered under the rubric of the interests of justice”: Vancouver (City) v.

Zhang, 2007 BCCA 280 (Chambers) at para. 10 . [ 24 ] If the question was whether leave should be granted to appeal the denial of an extension of time standing alone, I would not be inclined to grant leave. Whether to grant an extension of time is a discretionary decision that will seldom be of significance to the practice, or raise issues of principle necessary in the interests of justice to resolve. However, in this case, the extension denial does not stand alone.

The refusal to grant an extension of time to bring the jurisdictional challenge led directly to the decision that the applicants had attorned to the jurisdiction of the court. The two decisions may be described as intertwined with one another. [ 25 ] In Hiebert v. Miller , 2018 BCCA 216 , the Court provided a

summary of the law concerning the requirement to seek leave to appeal an order that is intertwined with other orders that may be appealed as of right.

Justice Willcock explained that once the jurisdiction of this Court is engaged in a cause, there is no need for a separate notice of appeal to address issues that arise in the cause, unless they are completely discrete. [ 26 ] The relevant question is whether the intended appeal is so intimately linked with the appeal that proceeds as of right that the interests of justice favour the two matters proceeding together, in which case leave should be granted: Hiebert at para. 30 . [ 27 ] Justice Fenlon applied Hiebert recently in a case in which two decisions were sought to be appealed, one of which was a limited appeal order.

The limited appeal order was a direct result of the order appealable as of right. Justice Fenlon held that the intended appeal was sufficiently linked with the appeal as of right that the interests of justice favoured the matters proceeding together, and granted leave: Liu v. British Columbia (Director of Civil Forfeiture) , 2023 BCCA 380 (Chambers) at paras. 20 , 23. [ 28 ] In our case, it is the appealable order that was the direct result of the limited appeal order.

In my view, the two issues are sufficiently intertwined that the interests of justice favour the grant of leave so that the division hearing the appeal is able to deal with the appeal on its merits. [ 29 ] Accordingly, I make the following orders: i. Leave to appeal is not required for the appeal of paragraphs 2 and 4 of the order sought to be appealed; and ii.

Leave to appeal is required for the appeal of paragraph 3 of the order, and is granted. [ 30 ] For clarity, I also order that the time for filing and serving the appeal record and other documents necessary to ready the appeal for hearing commences on the delivery of these reasons today. [ 31 ] Costs will be costs in the appeal. “The Honourable Mr. Justice Hunter”