Commercial Parties At Odds Over Appropriate Jurisdiction feature image

Commercial Parties At Odds Over Appropriate Jurisdiction

Purchasing products from other provinces within Canada or Internationally is certainly nothing new. The advancement of online companies that offer extremely quick shipping has only increased the popularity of purchasing products from elsewhere. For most people, resolving issues with the manufacturers or retailers of products can be as simple as reaching out to customer support. At the same time, it can be difficult if a retailer from another jurisdiction doesn’t care to respond. Of course, there’s a middle ground where a retailer may be based in one part of the country or the world, and the customer has an issue that cannot be resolved between the parties. 

In the event that such an impasse leads to civil litigation over a commercial matter, there could be questions about the appropriate jurisdiction or which province’s court is most appropriate to decide the outcome. 

This was the situation in a recent decision issued by the Provincial Court of Alberta in which the defendant, located in Saskatchewan, claimed an issue between them and a customer should be decided there rather than in Alberta, where the customer was located. 

Alberta business orders parts from Saskatchewan

The plaintiff’s business is located in Alberta, and it was from Alberta, where it ordered tires and rims from the defendant’s business, which is located in Saskatchewan. In Saskatchewan, the defendant fabricated the rims and mounted them on tires. The tires and rims were delivered to the plaintiff in Saskatchewan and then brought to Alberta for use on a seeder. The plaintiff claimed the rims and tires failed in performing their job and had to be repaired. It sought compensation for this repair from the defendant. The defendant applied for an Order dismissing the claim because the Alberta courts did not have jurisdiction to hear the matter.

How the courts determine jurisdiction

The court explained that the plaintiff must show a real and substantial connection between the action and the province of Alberta. Four factors must be established to make this connection. The court listed four presumptive factors that can help with this. The first is that the defendant lives in Alberta. The second is that the defendant carries on business in Alberta. The third would be that the contract was made between the parties in Alberta, and the fourth would be that negligence occurred in Alberta.  

In this case, the plaintiff’s business operates in Alberta, and its purchased product was put to use in Alberta. At the same time, however, the defendant operated in Saskatchewan. In the case at hand, the only factor the plaintiff could satisfy might be that the contract was made in Alberta. 

Even then, the location of the contract’s formation can be difficult to pinpoint. The court explained that in most cases, a contract could be considered formed at the location where an offer was accepted and communicated. In this case, the contract was agreed to over the telephone. There wasn’t any clarity on who offered and accepted the offer to purchase the tires and rims, so the location of the offer’s acceptance is difficult to pinpoint. 

Despite that ambiguity, the court decided to assume the contract was made in Alberta, that the plaintiff indicated the services it expected and the price it was willing to pay, and that the defendant accepted that offer. However, more is needed to make Alberta the appropriate jurisdiction. 

Which jurisdiction is appropriate in this case?

The court considered other factors, including the need for parties to travel. In this case, either province would require at least one party to travel, though the number of witnesses needed is unknown. 

The court looked at Alberta’s Provincial Court Civil Procedure Regulation, which states, 

For the purposes of section 14(4) [under which the clerk sets a hearing date], the clerk shall set the pre-trial conference, simplified trial or trial at the location where the Court holds regular sittings that is closest to the place where

(a)   the defendant resided or carried on business at the time that the civil claim was filed, or

(b)   the cause of action arose.

In this case, the court found it was “abundantly clear” that the cause of action arose in Saskatchewan. This is where the plaintiff received the defendant’s order. The defendant has no physical location in Alberta. The defendant also worked with a subcontractor who manufactured the rims. The rims were attached to the tires at the defendant’s place of business in Saskatchewan. This was enough for the court to conclude that if there was an act or omission for which the defendant was responsible, it occurred in Saskatchewan and not Alberta. 

The court also underscored the importance of the plaintiff taking delivery of the tires and rims in Saskatchewan. The only part of the chain of events in Alberta was using the materials sold to the plaintiff. 

The court wrote that there would be unfairness in determining Alberta as the appropriate jurisdiction. The court wrote,

“There is a certain unfairness inherent in the notion that the Plaintiff should choose to do business with a supplier in Saskatchewan and then sue that supplier in Alberta when the supplier has no business operations in Alberta, did the work complained of in Saskatchewan, and did not even go so far as to arrange to ship to Alberta.”

The last piece of information that contributed to the court’s decision was that if the plaintiff succeeds in Alberta, it would have to have its judgment registered in Saskatchewan for collection purposes, leading to an additional proceeding. For those reasons, the court determined the appropriate venue for the matter would be Saskatchewan. 

HMC Lawyers in Calgary Can Assist You In Your Civil Litigation Matters

At HMC Lawyers, our team of skilled lawyers knows that commercial disputes can be frustrating and difficult to work through. We work closely with our clients to understand their business and personal needs and identify the best potential outcome, then work diligently to resolve matters quickly and with certainty. To speak with one of our lawyers about a civil litigation matter, contact us online or call 1-800-480-3534. We represent construction clients in Calgary, throughout Alberta, and across Western Canada.


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At HMC Lawyers, we offer strategic legal advice. Our breadth of practice experience allows us to promptly handle almost every litigation-related legal issue that may arise, and anticipate potential roadblocks that may delay its resolution. To make an appointment with a member of our team, contact us online or call 403-269-7220

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