Sikorsky Aircraft Corporation v. Lloyd’s TSB General Leasing (No. 20) Limited, 2011 NLCA 49

Date: 20110630 Docket: 11/02 Citation: Sikorsky Aircraft Corporation v. Lloyd’s TSB General Leasing (No. 20) Limited , 2011 NLCA 49 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN : SIKORSKY AIRCRAFT CORPORATION INTENDED APPELLANT AND : LLOYD’S TSB GENERAL LEASING (NO. 20) LIMITED INTENDED FIRST RESPONDENT AND : COUGAR HELICOPTERS INC.

INTENDED SECOND RESPONDENT AND : UNDERWRITERS AT LLOYD’S OF LONDON, ALLIANZ GLOBAL RISKS US INSURANCE COMPANY, WESTPORT INSURANCE CORPORATION, GLOBAL AEROSPACE UNDERWRITING MANAGERS, GCAN INSURANCE COMPANY, UNDERWRITERS AT LLOYD’S PER CATLIN CANADA INC., and AIG AVIATION INC. INTENDED THIRD RESPONDENTS AND : THE ATTORNEY GENERAL OF CANADA IN RIGHT OF THE MINISTER OF TRANSPORT INTENDED FOURTH RESPONDENT

Coram: Welsh, Rowe and Harrington, JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division (General) 201001G3408 Appeal Heard: April 6 and April 7, 2011 Judgment Rendered: June 30, 2011 Reasons for Judgment by Welsh, J.A. Concurred in by Rowe and Harrington, JJ.A.

Counsel for the Appellant: Ronald Noseworthy, Q.C. and Robert Bell Counsel for the First, Second and Third Respondents: Kevin Stamp, Q.C. and Patrick Saul Counsel for the Fourth Respondent: Not Represented Welsh, J.A.: [ 1 ] The issues in this appeal relate to the jurisdiction of the courts in this Province to adjudicate claims resulting from the crash and loss of a helicopter that was ferrying workers to an oil platform in the Newfoundland offshore. The claims are against a company that is located in Connecticut, U.S.A.

Questions are raised regarding territorial jurisdiction over the claim, the convenience of this jurisdiction as a forum to adjudicate the claim, and attornment by the defendant to this jurisdiction. BACKGROUND [ 2 ] Sikorsky Aircraft Corporation (“Sikorsky”), which designs and manufactures helicopters, is located in Connecticut, U.S.A., and has no corporate presence in this Province. Cougar Helicopters Inc. (“Cougar”), which uses helicopters to ferry workers to offshore oil platforms, operates from and has a corporate presence in this Province.

Lloyds TSB General Leasing (No. 20) Limited, which has its registered office in London, England, and Underwriters at Lloyds of London et al. are the beneficial owners and insurers respectively of the helicopter that is the subject of this action. (For convenience, Lloyds TSB General Leasing and the insurers will be referred to collectively as “Lloyds”, and Cougar and Lloyds will be referred to collectively as “Cougar”.) Lloyds did not make any submissions on the application before this Court.

Similarly, the Attorney General of Canada, Representing the Minister of Transport, also named as a defendant in Cougar’s action, did not make any submissions. [ 3 ] On March 12, 2009, a helicopter designed and manufactured by Sikorsky, and operated by Cougar, crashed into the ocean about thirty-five miles off the coast of Newfoundland while ferrying workers to an oil platform. Seventeen crew and passengers lost their lives.

On June 24, 2010, Cougar, together with Lloyds, filed a statement of claim against Sikorsky alleging negligence in the design and manufacture of the helicopter, as well as fraud and negligent misrepresentation related to information regarding the safe operation of the helicopter. [ 4 ] Just prior to issuance of the statement of claim, Sikorsky, aware of the possible filing of a claim in this Province, commenced an action in Connecticut, as described by the applications judge (2010 NLTD(G) 213): [13] On June 16, 2010, Sikorsky commenced an action against Cougar and [Lloyds] seeking a declaratory order that any claim related to the crash of the helicopter would be adjudicated in Connecticut in accordance with applicable Connecticut law, and, further, Sikorsky sought an injunction prohibiting Cougar [and Lloyds] from commencing an action against Sikorsky in any other jurisdiction related to the loss of the helicopter.

This action was commenced in the United States District Court, District of Connecticut. There have been subsequent amendments made to that application resulting in the addition of parties and pleadings.

This claim was filed, as I see it, likely due to the potential for an action by [Cougar and Lloyds] to be commenced in this province, or elsewhere in Canada, and to attempt to ensure that United States maritime law could be applied, whereby a commercial user would have no cause of action in tort as against a commercial manufacturer to recover economic loss where that is the sole basis for the claim. … As well, Sikorsky alleged in that application that, from a contractual point of view, there were no warranties upon which [Cougar and Lloyds] could now rely upon to substantiate their claim. [ 5 ] In response, Cougar applied to have the action commenced by Sikorsky in Connecticut dismissed.

Just prior to the hearing of this appeal, a decision was received from the District Court of Connecticut, declining to exercise jurisdiction over the case, granting Cougar’s application, and dismissing Sikorsky’s action for a declaratory order and an injunction. [ 6 ] In the meantime, two applications were heard in the Trial Division of this Court. The first relates to a notice by Cougar discontinuing the action as against Helicopter Support, Inc. Cougar, relying on rule 19.01(

a) of the Rules of the Supreme Court, 1986 , did not seek either consent of the parties or leave of the Court. Sikorsky applied to have the notice of discontinuance set aside, with a

request that, should Cougar apply and be granted leave to discontinue the action as against Helicopter Support, leave would be subject tothe condition that Cougar could not take any further action as against Helicopter Support in this jurisdiction. The applications judgeconcluded that Cougar did not require leave of the Court or consent of the parties to discontinue its action as against Helicopter Support(Cougar Helicopters Inc. et al. v. Sikorsky Aircraft Corp. et al. (2010), 2010 NLTD 161 , 302 Nfld. & P.E.I.R. 351 (NLTD(G)).

That application has relevance for purposes of Sikorsky’s submissions regarding attornment to this jurisdiction. [7] In the second application, which is the subject of this appeal, Sikorsky argued that the Rules of Court required Cougar to seekleave of the Court before effecting ex juris service of the statement of claim, which was not done. Further, Sikorsky argued that the TrialDivision did not have territorial jurisdiction to hear the claim, and that, in any event, Connecticut would be the more convenient forumfor adjudication of the claim.

Finally, Sikorsky argued that it had not attorned to the jurisdiction of the Court based on proceedingsrelated to Cougar’s discontinuance of its action as against Helicopter Support. None of these submissions was accepted by theapplications judge. In the result, Sikorsky’s application was dismissed. ISSUES [8] Leave to appeal having been granted at the hearing, the issues on the appeal are whether the applications judge erred inconcluding that:

(1) Cougar’s claim is grounded in a real and substantial connection to this Province; (2) the courts in this Provinceprovide a convenient forum to determine the matter; and

(3) Sikorsky had attorned to the jurisdiction of the courts of this Province. ANALYSIS Leave to Appeal [9] Leave to appeal was required because this is an appeal from an interlocutory order (rule 57.02(1) of the Rules of the SupremeCourt, 1986). At the hearing, leave was granted, with reasons to follow. [10] Rule 57.02(4) specifies circumstances in which leave to appeal an interlocutory order may be granted. Paragraphs (

c) and (

d) ofthat rule, taken together, provide the basis for granting leave in this case. These paragraphs state: Leave to appeal an interlocutory order may be granted where … (

c) the Court considers that the appeal involves matters of such importance that leave to appeal should be granted, (

d) the Court considers that the nature of the issue is such that any appeal on that issue following final judgment would be of no practicaleffect, or … [11] In this case, preliminary issues of jurisdiction have been raised by the Connecticut based defendant, Sikorsky. When theapplications judge made his decision there was some uncertainty as to the analytical approach to be applied.

The above issues engagefundamental jurisdictional questions properly determined before the case proceeds on the merits and for which an appeal at thisinterlocutory stage is appropriate. (See, for example, Universal Helicopters Newfoundland Ltd. v.

Rolls-Royce Corp. et al. (2009), 2009NLCA 58 , 290 Nfld. & P.E.I.R. 204 (NLCA), at paragraphs 17 to 27.) Jurisdiction to Determine Cougar’s Claim [12] In general, where jurisdiction is being challenged by the defendant, the appropriate analytical approach is to begin with aconsideration of whether the action has a real and substantial connection to this jurisdiction and whether this jurisdiction provides aconvenient forum for adjudication of the claim. If these requirements are satisfied, the conclusion follows that the court has jurisdictionto proceed.

In that situation, it is unnecessary to consider whether the defendant attorned to the court’s jurisdiction. Real and Substantial Connection to this Jurisdiction [13] The first factor to be considered in determining whether the courts of this Province have jurisdiction over Cougar’s claim iswhether there is a real and substantial connection to this Province. The applications judge answered this question in the affirmative. Thejudge recognized that Sikorsky has no “physical presence and activity here”, and, therefore, “any connection between this forum and[Sikorsky as a defendant] is somewhat minimal”.

However, he concluded that a more important consideration is the “strong connectionof [Cougar’s] claim to this jurisdiction” (decision of the applications judge, at paragraph 96). The judge was satisfied that there is noparticular unfairness to Sikorsky in having the claim adjudicated here, and he considered the participation of the Attorney General ofCanada as a defendant in Cougar’s claim to be a relevant, but less important, factor.

While the applications judge proceeded on the basisthat the onus shifted to Sikorsky to rebut the presumption of a real and substantial connection to this jurisdiction, he stated that he wouldhave reached the same conclusion even if the onus had been on Cougar to establish the requisite connection. [14] When the applications judge made his decision, there was uncertainty as to the applicable law regarding the real and substantialconnection analysis. The approach largely relied on by the applications judge is set out in Van Breda v.

Village Resorts Ltd. (2010), 2010 ONCA 84 , 316 D.L.R. (4th) 201 (ONCA), leave to appeal granted (2010 S.C.C.A. No. 174). That decision and relatedissues were recently canvassed by this Court in Fewer v. Ellis, 2011 NLCA 17. The approach in Van Breda was not entirely endorsed. Two issues that require consideration are the manner in which the court assesses fairness as a factor in the analysis and whether the onusof proof may shift to the defendant. [15] In Van Breda, the Court refined a test that it had set out earlier in which the fairness of assuming or refusing jurisdiction wereconsidered separately.

The Court concluded that these should be collapsed into one factor and considered together. Further, regarding

fairness as a factor in the analysis, Sharpe J.A., for the Court, wrote: [98] Second, consideration of fairness should not be seen as a separate inquiry unrelated to the core of the test, the connection betweenthe forum, the plaintiff’s claim and the defendant.

Consideration of fairness should rather serve as an analytic tool to assess therelevance, quality and strength of those connections, whether they amount to a real and substantial connection, and whether assumingjurisdiction accords with the principles of order and fairness. [99] Third, I agree with [Club Resort’s] submission that unfairness to the plaintiff in not assuming jurisdiction does not amount to anindependent factor capable of trumping the want of a real and substantial connection between the forum and the plaintiff’s claim and/orthe defendant. … [16] In Fewer, White J.A., for the Court, discussed the relevance of fairness in the analysis: [42] In my view, fairness should permeate the connections analysis; it should be considered when assessing the strength, quality andrelevance of the connections themselves.

I believe this is what Justice La Forest was referring to in Hunt [ (SCC),[1993], 4 S.C.R. 289] when he said that “the assumption of and discretion not to exercise jurisdiction must ultimately be guided by therequirements of order and fairness, not a mechanical counting of contacts or connections” [at page 326].

In other words, while the testmust ultimately look at the geographical connections the defendant and the transaction have to the jurisdiction, it is the quality, not thequantity, of those connections that matters. [17] The question of shifting the onus of proof by means of a presumption was also considered in Fewer. This Court adopted adifferent approach from that in Van Breda. White J.A. first set out the Ontario approach: [48] Another important aspect of the Van Breda decision was its adoption of “category based presumptions”.

If a plaintiff candemonstrate the existence of any of the circumstances enumerated in Rule 17.02 (service ex juris) of the Ontario Rules of CivilProcedure (with the exception of Rule 17.02(

H) and (O)), a real and substantial connection is presumed. … … [50] Significantly, the presumption is not raised where the plaintiff has suffered damages in Ontario (Rule 17.02(H)) or where thedefendant is a necessary or proper party to an action (17.02(O)). [51] With minor exceptions, Newfoundland and Labrador Rule 6.07(1), which sets out circumstances under which service ex juris ispermitted without leave of the court, is substantially the same as Ontario Rule 17.02.

White J.A. concluded: [52] It is not necessary to go as far as creating a presumption that a real and substantial connection exists where one of those situationsis found to exist. Those circumstances will, however, be strong indicia that a real and substantial connection does exist, with the onusremaining on the plaintiff to establish that the real and substantial connection test is satisfied where the assertion is challenged by thedefendant. [18] After canvassing the issues, White J.A. summarized principles applicable in this jurisdiction: [53] …

(1) Jurisdiction can be assumed where there is a real and substantial connection between the jurisdiction and the subject matter of theaction or the defendant;

(2) In assessing whether jurisdiction is engaged a real and substantial connection can be demonstrated where the strength, relevance andquality of the connections between the jurisdiction and the subject matter of the action or the defendant make it fair to the defendant toassume jurisdiction;

(3) Fairness to both parties is the goal of the analysis, but it does not form an independent factor which must be considered, nor does ittrump weak connecting factors; and

(4) The circumstances listed in Rule 6.07(1) are strong indicia of a real and substantial connection, but do not create a presumption thatthe test has been satisfied. [19] It is clear that the analysis requires a balancing of the relevant factors to achieve a result based on the quality of the connectionto this jurisdiction taking into account any potential unfairness to either party.

In this case, the applications judge was satisfied that thesubject matter of Cougar’s claim has a “strong connection” to this jurisdiction while the claim has a “somewhat minimal” connection asregards the defendant Sikorsky, with “no particular unfairness” to Sikorsky in having the matter adjudicated in this jurisdiction. [20] As a beginning point, Sikorsky submitted that “even closer scrutiny and fairness to the defendant” should be applied to adefendant located outside Canada, as in this case, as opposed to a defendant within Canada but outside the Province, as in Fewer.

Insupport of the submission, Sikorsky relied on the decision in Van Breda. The issue in Van Breda was whether the Ontario courts shouldassume jurisdiction “in claims for personal injury damages occasioned as a result of accidents suffered by Canadian tourists at resorts inCuba” (paragraph 1). Sharpe J.A., for the Court, referred to Supreme Court of Canada decisions that endorse the conclusion that: [104] … the assumption of jurisdiction is more easily justified in interprovincial cases than in international cases.

In Morguard [ (SCC), [1990] 3 S.C.R. 1077], at pp. 1098 and 1101, La Forest J. stated that the “considerations underlying the rules of comityapply with much greater force between the units of a federal state”, that a federation “implies a fuller and more generous acceptance ofthe judgments of the courts of other constituent units of the federation”, and that “the rules of comity or private international law as they

apply between the provinces must be shaped to conform to the federal structure of the Constitution.” … Sharpe J.A. concluded: [106] I agree, however, with the submission that it is not useful to treat the difference between international and interprovincialjudgments as one of several items on a multi-factor list having more or less equal weight with the other factors. Rather, it should beregarded [as] a general principle of law that generally shapes and guides the analysis of real and substantial connection. [21] This conclusion must be read in light of the decision in Beals v.

Saldanha, 2003 SCC 72 , [2003] 3 S.C.R. 416, whereMajor J., for the majority, commented, at paragraph 25, that the reasoning in Moran “is equally compelling with respect to foreignjurisdictions”.

The net effect of the Supreme Court of Canada decisions is that, while it may prove easier to establish the requisiteconnection where the out-of-province party is within Canada, the fact that the case may involve an international party does not alter thefundamental principles to be applied. [22] As applied to the case before this Court, while arguably it may have been easier to justify the assumption of jurisdiction hadSikorsky been located in Canada, Sikorsky has not demonstrated that the applications judge erred by failing to take account of thecompany’s position as an international, rather than an interprovincial, defendant.

The applications judge was clearly aware of Sikorsky’sstatus throughout the analysis. [23] As regards the onus of proof, the applications judge, relying on the decision in Van Breda, accepted the proposition that thereexists a rebuttable presumption of jurisdiction because Sikorsky is, under rule 6.07(1)(j), “a necessary or proper party to a proceedingproperly brought against another person served within the province”, that is, the Attorney General of Canada.

As noted above,incorporation of this presumption was rejected in Fewer in favour of assessing the factors listed in rule 6.07(1) as indicia of a real andsubstantial connection.

However, the approach adopted by the applications judge did not affect the result because he stated clearly thathe would have reached the same conclusion if the presumption had not applied and the onus had been on Cougar to establish therequisite real and substantial connection. [24] Sikorsky submitted that, because the applications judge found that the connection between this jurisdiction and Sikorsky is“somewhat minimal”, this necessarily negates the possibility of establishing the requisite real and substantial connection. Thissubmission is not persuasive.

The assessment of whether a real and substantial connection is established involves a balancing of all the relevant factors.

As indicated by theapplications judge, the relatively minimal connection of the defendant in this case must be assessed in light of the strong connection ofthe subject matter to this jurisdiction as well as his finding that adjudicating the claim here would not result in any particular unfairnessto Sikorsky. [25] With respect to the subject matter of the action, Sikorsky submitted that the claim relates to the design and manufacture of thehelicopter, which took place in Connecticut, and that the allegations of fraudulent misrepresentation “take [Cougar] directly to personnelin Connecticut, not Newfoundland and Labrador”.

Such submissions fail to recognize a critical element of the claim, that is, Cougar’sreliance, in this jurisdiction, on Sikorsky’s representations regarding the dry run time should the helicopter’s gear box lose oil pressure,and Sikorsky’s failure, particularly following an incident in Australia, to warn Cougar of the danger of delay in replacing the titaniumbolts on the gearbox.

The applications judge explained: [80] … With the information they had, Cougar and its employees acted having regard to information provided by Sikorskyconcerning the maintenance and operation of its S-92 helicopters stationed in this province, including the helicopter that crashed. Cougarhas its base of operations for its offshore oil business in St. John’s and it employs some 186 persons here. Maintenance employees workat its St.

John’s location as well as the helicopter pilots. … And further: [91] Here, I am more than prepared to accept that Sikorsky knew, or reasonably should have known, that their S-92 helicopters werebeing operated by Cougar in this province to service the offshore oil industry. While it might be argued that there was no directrelationship between Cougar and Sikorsky, I find there exists a sufficient linkage between the claim of [Cougar] and this province toground the application of the Moran [ (SCC), [1975] 1 S.C.R. 393] rationale.

Significant relevant events supporting thealleged claim of [Cougar] took place within this jurisdiction. It is my opinion that while design and manufacture of the helicopter mayhave taken place in Connecticut, the helicopter in question was obviously based in this jurisdiction and used by Cougar to further its owncommercial enterprise here. [Underlining in the original.] [26] The applications judge’s conclusion that the subject matter of the action has a strong connection to this jurisdiction is consistentwith principles discussed in Morguard Investments Ltd. v. De Savoye, (SCC), [1990] 3 S.C.R. 1077.

In that decision, atpages 1106 and 1107, La Forest J., for the Court, referred to the Court’s earlier decision in Moran v. Pyle National (Canada) Ltd., (SCC), [1975] 1 S.C.R. 393, regarding the real and substantial connection analysis: … At the end of the day, [Dickson J., in Moran] rejected any rigid or mechanical theory for determining the situs of the tort.

Rather, headopted “a more flexible, qualitative and quantitative test”, posing the question, as had some English cases there cited, in terms ofwhether it was “inherently reasonable” for the action to be brought in a particular jurisdiction, or whether, to adopt another expression,there was a “real and substantial connection” between the jurisdiction and the wrongdoing.

Dickson J. thus summarized his view, at pp.408-9: … Applying this test to a case of careless manufacture, the following rule can be formulated: where a foreign defendant carelesslymanufactures a product in a foreign jurisdiction which enters into the normal channels of trade and he knows or ought to know both thatas a result of his carelessness a consumer may well be injured and it is reasonably foreseeable that the product would be used orconsumed where the plaintiff used or consumed it, then the forum in which the plaintiff suffered damage is entitled to exercise judicialjurisdiction over that foreign defendant.

This rule recognizes the important interest a state has in injuries suffered by persons within its

territory. It recognizes that the purpose of negligence as a tort is to protect against carelessly inflicted injury and thus that thepredominating element is damage suffered. By tendering his products in the market place directly or through normal distributivechannels, a manufacturer ought to assume the burden of defending those products wherever they cause harm as long as the forum intowhich the manufacturer is taken is one that he reasonably ought to have had in his contemplation when he so tendered his goods.

This isparticularly true of dangerously defective goods placed in the interprovincial flow of commerce. [Emphasis added [in Morguard].] [27] The reasoning in Moran was applied in the context of failure to warn consumers about a hazardous product in Stanway v. WyethPharmaceuticals Inc., 2009 BCCA 592.

Smith J.A., for the Court, explained: [59] Although Moran concerned the enforcement of a provincial judgment in another province, the Court found this reasoning“equally compelling with respect to foreign jurisdictions” (Beals at para. 25). [60] As well, a failure to warn British Columbia consumers of a hazardous product is a tort committed in British Columbia, regardlessof where the omission took place, if the defendant knew or ought to have known the product would be used in British Columbia – theduty to warn is a duty to warn the consumer in this jurisdiction [authority omitted]. [28] Sikorsky submitted that the reasoning in Moran does not apply in this case because the claim is for pure economic loss.

Sikorsky stated, in its factum: [74] Moran v. Pyle does not properly inform the real and substantial connection analysis for claims in pure economic loss arisingfrom loss or damage to a complex commercial product purchased following arms length negotiations and used pursuant to a complexweb of commercial agreements. Negotiations with respect to a complex commercial product are entirely different than the “stream ofcommerce” tort concept in Moran v. Pyle. [29] I do not accept the proposition that the reasoning in Moran should be limited as suggested by Sikorsky.

First, there is no reasonin principle to deny jurisdiction on the basis that the plaintiff’s claim is grounded in pure economic loss. For example, in Alteen et al. v.Informix Corp. (1998), (NL SC), 164 Nfld. & P.E.I.R. 301 (NLTD(G)), the court in this Province assumedjurisdiction where the plaintiffs alleged that they had suffered damages related to their purchase of shares in the foreign defendantcompany.

The claim was based on their reliance on false and misleading representations made by the company which resulted in theartificial inflation of the price of their shares. [30] As to the complexity of commercial negotiations related to the purchased product, the application of the reasoning in Moranwill depend on the particular facts.

In this case, the applications judge had ample basis on which to conclude that Sikorsky “knew, orreasonably should have known, that their S-92 helicopters were being operated by Cougar in this province to service the offshore oilindustry” (paragraph 25, above). [31] In addition, Sikorsky submitted that, for purposes of applying the real and substantial connection analysis, Cougar is bound by achoice of law provision, that is, Connecticut, in the contract for sale.

The applications judge noted that there “is no direct contractualrelationship as between Cougar, one of the Plaintiffs, and Sikorsky” (decision of the applications judge, at paragraph 115) (underlining inoriginal). As a result, as discussed below at paragraph 39, it is not clear at this stage that Connecticut law will govern Cougar’s claim. Further, even if Connecticut law is found to govern, the courts of this Province are competent to apply the law of other jurisdictions. (See, for example, Midnight Marine Ltd. v.

Underwriters, Lloyd’s, London (2010) 2010 NLCA 64 , 302 Nfld. & P.E.I.R. 85(NLCA), at paragraph 47). [32] A further consideration arises from the principles set out in the Fewer decision; that is, that the circumstances listed in rule6.07(1) are indicators of a real and substantial connection. In this case, the applications judge determined that paragraph (

j) of that ruleapplies because the Attorney General of Canada is a party to the action. Rule 6.07(1)(

j) states: A document by which a proceeding is commenced may be served outside of the province where, … (

j) a person out of the province is a necessary or proper party to a proceeding properly brought against another person served within theprovince; … [33] The applications judge was satisfied that this rule applies: [86] … Sikorsky is a necessary or proper party to a proceeding properly brought against another person served within thejurisdiction, here that being the Attorney General of Canada representing the Minister of Transport.

I am not persuaded here thatclaiming against Canada in these circumstances was solely done for tactical advantage so as to permit use of the service ex juris rule as isargued by Sikorsky. I must rely on the pleadings in the Statement of Claim and, at this stage, I am unable to conclude that they appear tohave no merit with regard to the claim being made against Canada. … [34] Cougar also relies on rule 6.07(1)(

h) which provides for service outside the Province where “the proceeding is founded on a tortcommitted within the province”. The applications judge concluded that, “at least part of the tortious acts alleged have a substantial linkand did occur within this province” (decision of the applications judge, at paragraph 80). [35] Sikorsky has not established any basis on which to conclude that the applications judge erred in applying rule 6.07(1), or that heerred in permitting service ex juris without the need for leave of the Court. Further, in light of the principles set out in Fewer, theapplication of paragraphs (

h) and (

j) of rule 6.07(1) supports the conclusion that there is a real and substantial connection of the claim tothis jurisdiction.

[36] Based on the above considerations, balancing the relevant factors to assess the quality of the connection of Cougar’s action tothis jurisdiction, and taking into account the applications judge’s determination that Sikorsky would not suffer any particular unfairnessif the claim is adjudicated in this jurisdiction, it follows that the applications judge did not err in concluding that the requisite real andsubstantial connection of the action to this jurisdiction is satisfied.

Convenience of the Forum [37] Having concluded that the applications judge did not err in determining that Cougar’s claim has a real and substantialconnection to this jurisdiction, the next step is a consideration of whether he erred in finding this to be a convenient forum foradjudication of the claim. (See: Fewer v. Ellis, supra, at paragraphs 9 to 12.) [38] The applications judge considered several factors in concluding that this jurisdiction constitutes a convenient forum.

As towitnesses, he was satisfied that, whether the action was adjudicated in Connecticut or in this jurisdiction, one of the parties would beinconvenienced and would face additional expense. Recognizing that “inconvenience to one or some of the parties will arise no matterwhich forum is chosen”, he considered this to be a neutral factor (decision of the applications judge, at paragraph 111).

Sikorsky haspointed out the potential inconvenience and difficulties it would encounter if the matter is adjudicated in this jurisdiction, but has notprovided any basis on which to conclude that the applications judge erred in exercising his discretion in reaching the above conclusion. [39] As to the law to be applied, the applications judge rejected Sikorsky’s submission that Connecticut law would necessarilygovern.

He explained that it was not clear at this preliminary stage that Cougar’s claim must be judged in accordance with Connecticutlaw, particularly since it is based on a tort alleged to have occurred in this Province, rather than on contract. I agree that the question ofwhich law governs is a matter to be decided based on the facts as determined by the trial judge, and is not properly considered at thispreliminary stage.

Governing law is, therefore, of no assistance in considering the convenience of the forum for adjudication ofCougar’s claim. [40] Sikorsky also took the position that Cougar was “forum shopping” in commencing its claim in this jurisdiction where a claim intort for pure economic loss is available, whereas a similar claim may not be pursued in Connecticut.

The applications judge rejected thisproposition: [115] As for the factor related to juridical advantage, it is argued that if Connecticut is the forum that deals with [Cougar’s] claim,[Cougar] will suffer significant disadvantage due to the law in that jurisdiction preventing the recovery of pure economic loss in aproducts liability type of proceeding. While it is possible that the laws of England might be brought into play on this issue as well, I seethis factor favouring [Cougar’s] choice of this court as opposed to the Connecticut Court hearing this matter.

In saying this, this courtwill have an equal ability to apply whatever the law found to govern the proceedings might be, as would the Connecticut Court.

Byexercising my discretion to decline jurisdiction in these full circumstances, potential exists to deprive [Cougar] of legitimate juridicaladvantage, particularly in a case where geography and operations dictate a significant real and substantial connection to this province andwhere there is no direct contractual relationship as between Cougar, one of the Plaintiffs, and Sikorsky. … [41] In reaching this conclusion, the applications judge applied the general principle set out in Amchem Products Inc. v. BritishColumbia (Workers’ Compensation Board), (SCC), [1993] 1 S.C.R. 897, at page 912.

Sopinka J., for the Court,explained: This does not mean, however, that “forum shopping” is now to be encouraged. The choice of the appropriate forum is still to be made onthe basis of factors designed to ensure, if possible, that the action is tried in the jurisdiction that has the closest connection with the actionand the parties and not to secure a juridical advantage to one of the litigants at the expense of others in a jurisdiction that is otherwiseinappropriate. I recognize that there may be cases in which the best that can be achieved is to select an appropriate forum.

Often there isno one forum that is clearly more appropriate than others. [42] In the case before this Court, the applications judge proceeded on the basis of the real and substantial connection of the subjectmatter of the action to this jurisdiction. He determined that this was not a case of Cougar “forum shopping” in order to disadvantageSikorsky with the result that the claim would be adjudicated in a jurisdiction that would otherwise be inappropriate.

Further, as noted bythe applications judge, an allegation of forum shopping may as validly be made against Sikorsky based on the submission that Cougar’sclaim for pure economic loss would be precluded by the law in Connecticut. [43] As to avoiding a multiplicity of proceedings, the suggestion by Sikorsky that Connecticut would be the more appropriate forumis clearly undermined by the decision of the Connecticut court declining to exercise jurisdiction.

There is no evidence that a decisionfrom this jurisdiction could not be enforced in Connecticut. [44] In assessing the convenience of this jurisdiction as the forum for adjudicating Cougar’s claim, the applications judge consideredfactors that were identified as relevant in Teck Cominco Metals Ltd. v. Lloyd’s Underwriters, 2009 SCC 11 , [2009] 1 S.C.R.321 (see paragraphs 22 and 14).

These factors include: the comparative convenience and expense for the parties and their witnesses; thelaw to be applied; avoiding multiplicity of proceedings; avoiding conflicting decisions; enforcement of a judgment; and “the fair andefficient working of the Canadian legal system as a whole”.

Sikorsky has not established that the applications judge erred in hisassessment of these factors or in his determination that this jurisdiction is a convenient forum for the adjudication of Cougar’s claim. [45] In the result, the requirements are satisfied such that Cougar’s claim has a real and substantial connection to this jurisdiction andthis Court is a convenient forum for adjudicating the claim. The conclusion follows that the courts of this Province have jurisdiction toproceed with Cougar’s claim.

Attornment [46] Given the above conclusion, it is unnecessary for purposes of this appeal to address the question of whether Sikorsky hasattorned to the jurisdiction of the courts of this Province. That question has been rendered irrelevant. However, the decision of theapplications judge raises issues which may be considered in future cases, and for which the following obiter dicta may be of assistance.

[47] The applications judge concluded that Sikorsky had attorned to the jurisdiction of the courts of this Province when, after Cougarfiled a notice of discontinuance of its claim as against Helicopter Support, Sikorsky applied to have the notice set aside, and, at the sametime, requested an order that “if leave was granted by the Court for [Cougar] to file the Notice of Discontinuance, such should only begranted on the condition that [Cougar] could bring no further action or proceedings against [Helicopter Support] related to the subjectmatter of the claim made against [Helicopter Support] in the Statement of Claim” (decision of the applications judge, at paragraph 24). [48] The applications judge first determined that Sikorsky’s application in response to Cougar’s notice of discontinuance did not fallwithin the scope of rule 6.07 of the Rules of the Supreme Court, 1986, which permits a defendant outside the jurisdiction to avoidattorning to the jurisdiction of the court in particular circumstances.

Rule 6.07(7) provides: A person who has been served with an originating document outside of the province may apply without submitting to the jurisdiction ofthe court, before filing or serving a defence or appearing on an application, (

a) for an order setting aside the service and any order that authorized the service; or (

b) for an order staying the proceeding. [49] The applications judge concluded: [26] … Here, what Sikorsky did fell beyond what is provided for in Rule 6.07(7) in that it, along with [Helicopter Support], sought anorder to strike the Notice of Discontinuance filed as well as additional relief.

The question that arises is does this then amount toattornment by Sikorsky? [27] Where a person goes beyond what is permitted in Rule 6.07(7) when contesting jurisdiction, the common law must prevail suchthat, absent duress, any appearance before the Court will be considered voluntary. … [50] The applications judge went on to conclude that “a person will not be considered to have attorned to a court’s jurisdiction wheretheir appearance before that court relates solely to procedural [matters] as opposed to the merits of the case or to substantive matters”(paragraph 28).

Nonetheless, the applications judge cautioned that “a person can attorn to the jurisdiction of a court inadvertently andnotwithstanding lack of intention to do so” (paragraph 29). [51] As applied to this case, the applications judge found that Sikorsky went beyond applying for a procedural order relating to it inits status as a defendant, particularly by “asking the Court for relief related to another party [Helicopter Support]” (decision of theapplications judge, at paragraph 30) (emphasis in original).

He went on to state: [31] This conclusion is strengthened somewhat by the additional remedy sought by Sikorsky (and [Helicopter Support]) to bar furtherproceedings by [Cougar] related to the subject matter of their claim as against [Helicopter Support]. … [32] … By joining in [the Cougar] application related to a separate party and seeking relief based upon a merits-based argument,Sikorsky acted in a manner that invoked acceptance of this court’s jurisdiction. [52] I begin with the fact that Sikorsky has consistently indicated its intention to contest the jurisdiction of the courts of this Provinceto adjudicate Cougar’s claim.

The purpose of Sikorsky’s response to Cougar’s notice of discontinuance was to determine the parties tothe proceeding. This was a preliminary matter raised before any proceedings as to the merits of the claim had been commenced. [53] Rule 6.07 is directed only to the service of a document commencing an action. Subsection (7) specifies that a person servedwith an originating document outside the Province may, without attorning to the court’s jurisdiction, apply for an order either “settingaside the service and any order that authorized the service”, or “staying the proceeding”.

If the defendant’s complaint is not related toservice of the originating document, the rule has no application. [54] In this case, the applications judge relied on a common law rule which he found endorsed attornment to the court’s jurisdiction,“such that, absent duress, any appearance before the Court will be considered voluntary”. It may be argued that, in applying the commonlaw as to attornment, considerations of equity and fairness would properly be taken into account, and that an analysis beyond thecharacterization of the defendant’s action as procedural may be necessary. For example, in Beals v.

Saldanha, supra, in his dissentingopinion, LeBel J. discussed the issue: [208] … Such factors as contractual agreement to accept jurisdiction and habitual residence in the foreign forum are usually very clearexamples of the kind of connection that reasonably supports the assumption of jurisdiction.

Attornment by actively defending the actionin the foreign jurisdiction is a slightly different kind of connection; because the defendant has chosen to have his day in court in theforeign forum, no unfairness results from the enforcement of the foreign court’s judgment. [209] In some cases, however, the traditional grounds may be more arbitrary and formalistic than they are fair and reasonable.

Underthe traditional rules, for example, jurisdiction could be acquired by serving a defendant who was present in the jurisdiction, even if herpresence was only fleeting and was completely unconnected to the action, and in the absence of any other factor supporting jurisdiction. Another example is the common law rule that an appearance solely for the purpose of challenging the jurisdiction of the foreign courtwas an attornment to its jurisdiction, which was argued (but not commented on by the court) in United States of America v. Ivey (1995), (ON SC), 26 O.R. (3d) 533 (Gen. Div.).

Circumstances such as these may not amount to a real and substantialconnection, and in my view they should not continue to be recognized as bases for jurisdiction just because they were under thetraditional rules. [55] The case now before this Court provides an example of the untenable position in which the defendant may be placed, having tochoose whether to abandon its jurisdictional challenge or to take action it deems necessary in the event the jurisdictional challenge provesto be unsuccessful.

These are issues, among others, which are not to be decided here, but which may be considered in an appropriatecase, and which may require refinement of the common law or its

interpretation or application.

SUMMARY AND DISPOSITION [ 56 ] In

summary, the applications judge did not err in concluding: (1) that service of Cougar’s statement of claim on Sikorsky did not require consent of the Court; (2) that the requisite real and substantial connection of Cougar’s claim to this jurisdiction is satisfied; and (3) that this jurisdiction is a convenient forum for adjudication of the claim. It follows that the courts of this Province have jurisdiction to decide Cougar’s claim. It is unnecessary to decide the question of whether Sikorsky attorned to the Court’s jurisdiction. [ 57 ] Accordingly, leave to appeal having been granted, the appeal is dismissed.

Cougar Helicopters is entitled to its costs of the appeal as against Sikorsky, on a party and party basis. _______________________________ B. G. Welsh, J.A. I Concur: ___________________________ M. H. Rowe, J.A. I Concur: ___________________________ M. F. Harrington, J.A.