





CITATION: BTR Global Opportunity Trading
          Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 518



DATE: 20110714



DOCKET: C53335



COURT OF APPEAL FOR ONTARIO



Weiler, Moldaver and Epstein JJ.A.



BETWEEN



BTR
          Global Opportunity Trading Limited, BTR Global Growth Trading Limited, BTR
          Global Arbitrage Trading Limited, and BTR Global Prospector Trading Limited




Plaintiffs (Respondents)



and



RBC Dexia Investor Services Trust and

Lehman Brothers International (Europe)



Defendants (
Appellant
)



Christopher D. Bredt, Douglas O. Smith and Heather K. Pessione,
          for the appellant



Jeffrey S. Leon, for the respondents



Heard and released orally:
July 8, 2011



On appeal from the order of Justice Colin L. Campbell of the
          Superior Court of Justice dated January 25, 2011, with reasons reported at
          2011 ONSC 316.



ENDORSEMENT



[1]

The appellant, Lehman Brothers International (Europe)
    (LBIE), appeals from the order dismissing its motion to enforce an exclusive
    forum selection clause in Customer Account Agreements and Margin Lending Agreements
    (the Agreements) with the respondents (collectively referred to herein as BTR
[1]
) by staying or
    dismissing BTRs Publics Action.  The exclusive forum selection clause
    selected New York State as the forum for resolution of all disputes relating
    to the Agreements.


[2]

The Publics Action is the term used by the parties to refer to BTRs
    action in relation to certain publicly traded securities of Canadian companies
    located in Ontario and is
Court File No. CV-10-8671-00CL.  The
    term Privates Application, used later in these reasons, refers to BTRs
    actions in relation to private securities of Canadian companies in Ontario and
    is Court File No. CV-10-7807-00CL.  RBC Dexia Investors Services Trust, the
    agent of LBIE and the actual custodian of the securities on its behalf, took no
    position on this appeal.

[3]

The remedy available under s. 106 of the
Courts of Justice Act
, R.S.O.
    1990, c. C.43, which provides that a court may stay any proceeding on such
    terms as are just, is discretionary.  The motions judges decision will only be
    set aside if the exercise of  his or her discretion is based upon a wrong
    principle, a failure to consider a relevant principle or a misapprehension of
    the evidence:
Mobile Mini Inc. v. Centreline Equipment Rentals Ltd.
(2004), 190 O.A.C. 149 (C.A.), at para. 2.  Particular deference is owed to
    this order given the motions judges experience not only in overseeing more
    than two years of litigation regarding the ownership of the securities in issue,
    but also as a senior commercial list judge.

[4]

In the main, the motions judge dismissed LBIEs application on the
    following bases:

1.

LBIE did not discharge its onus of showing that the Agreements and the
    exclusive jurisdiction clause contained therein applied to the factual matrix
    of this case; and

2.

Even if the Agreements applied, BTR had demonstrated strong cause to not
    enforce the jurisdiction selection clause because, among other factors, the
    position taken by LBIE amounted to a collateral attack on orders made by the
    Superior Court in 2008 and 2009 pursuant to an application and motions of which
    it was aware prior to their being argued, but chose not to challenge the
    jurisdiction of the Canadian court at that time or since.

[5]

LBIE submits that the motions judge was plainly wrong when he held that
    there was an issue as to whether the litigation relates to the Agreements.  LBIE
    further submits that the motions judge, in the exercise of his discretion, took
    into account irrelevant and improper factors in deciding that BTR had demonstrated
    strong cause.  Finally, LBIE submits that the motions judge erred in holding
    that LBIEs motion was a collateral attack on previous orders of the court.

[6]

Assuming, without deciding, that the forum selection clause does apply
    and that it must be enforced in the absence of exceptional circumstances, we
    are satisfied nonetheless that the appeal must fail.  In our opinion, BTR has
    shown strong cause, within the meaning of
Z.I. Pompey Industrie v.
    ECU-Line N.V.
, [2003] 1 S.C.R. 450, and subsequent decisions of this court,
    not to give effect to the forum selection clause.

[7]

In
Z.I. Pompey,
Bastarache J. stated at para. 39:

[T]he court must grant the stay unless the
    plaintiff can show sufficiently strong reasons to support the conclusion that
    it would not be reasonable or just in the circumstances to require the
    plaintiff to adhere to the terms of the clause.

[8]

As interpreted by this court,

a strong reason includes inordinate
    delay in raising the jurisdictional issue:
Mobile Mini Inc.
, at paras.
    7-9
; Momentous.Ca Corp. v. Canadian American Assn. of Professional Baseball
    Ltd.
(2010), 103 O.R. (3d) 467 (C.A.), at paras. 41-42.  It follows that we
    do not read the decision in
Expedition Helicopters Inc. v. Honeywell Inc.
(2010), 100 O.R. (3d) 241 (C.A.),

as foreclosing consideration of
    factors other than those listed therein at para. 24. Factors pertaining to
    justice or reasonableness may be considered in deciding whether the forum
    selection clause should be enforced.

[9]

While the motions judge may have been in error in referring to the
    motion before him as being a collateral attack on prior decisions of the court,
    he did not err in taking LBIEs conduct into consideration in concluding that
    the respondent had established strong cause.  Although the Publics Action is a
    different action than the Privates Application, the argument as to jurisdiction
    selection now being made is the same argument that could and should have been
    raised by LBIE as an affected party in the Privates Application in 2008.  The
    fact that these are separate proceedings is really a distinction without a
    difference as it is conceded that the same exclusive forum selection clause is
    at issue in both proceedings.  This factor in our view is very significant and
    weighs heavily in favour of BTRs position.

[10]

Moreover, LBIE has made itself a moving target throughout and this has
    prejudiced BTR, both in terms of the way BTR has argued the motions before the
    motions judge and in determining BTRs future course of conduct.  For example:

·

Before the motions judge, LBIE was not prepared to give up on its
    argument that the Agreements, which contain the exclusive jurisdiction clause,
    may be invalid as creating a preference.  It was only at the outset of argument
    before this court that LBIE advised that it would not be raising the preference
    issue, and thus the validity of the Agreements.

·

LBIE did not appeal the order of the motions judge dismissing its
    motion for a dismissal of BTRs request for directions concerning the Privates
    Application.

·

By its conduct, LBIE has created the risk of inconsistent
    verdicts between Canada and the United States between the Publics Action and
    the Privates Application.

[11]

For these reasons, which differ somewhat from the reasons of the motions
    judge, we would not interfere with the order refusing the stay.

[12]

Accordingly, the appeal is dismissed.  BTR is entitled to its costs,
    which we fix at $20,000 inclusive of all taxes and disbursements.

Karen M. Weiler J.A.

M. Moldaver J.A.

G.J. Epstein J.A.





[1]
BTR consists of BTR Global Opportunity Trading Limited, BTR Global Growth
    Trading Limited, BTR Global Arbitrage Trading Limited and BTR Global Prospector
    Trading Limited.


