When an employer is based in one province and has an employee situated in a different province, which is the appropriate form for resolution of a dispute involving the employee? The BC Court of Appeal recently addressed the question of whether British Columbia or Alberta was the more appropriate forum for resolution of an employment dispute in Bit v. Krahn Engineering Ltd., 2025 BCCA 167.
The employer was located in British Columbia, and had operations in British Columbia and Alberta. The employee resided and worked in Alberta.
The employer terminated the employee for cause. The employer alleged that the employee breached his fiduciary and contractual duties by spending time and company resources doing work for a company called CTA Architecture and Design Ltd. (“CTA”). The employer filed two actions against the employee in the BC Supreme Court. The action at the centre of the jurisdictional dispute alleged that the employee breached his fiduciary and contractual duties to his employer (the “BC Action”).
The employee challenged that BC was the appropriate forum and argued that Alberta was the more appropriate forum for the BC Action.
Notably, the employee’s contract contained a ‘forum selection clause’ which stated:
“This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable in that Province and shall be treated, in all respects, as a Albertan contract. Each of the Parties agrees that any action or proceeding related to this Agreement or the transactions contemplated herein may (but need not) be brought in any court of competent jurisdiction in the Province of Alberta, and for that purpose hereby attorns and submits to the jurisdiction of such Alberta court.”
The judge determined that this clause did not clearly direct that Alberta would be the exclusive jurisdiction for litigating disputes because of the bracketed language “but need not”.
The court also considered whether there were multiple proceedings in multiple jurisdictions covering the same issue. Although the employee was intending to commence a claim in Alberta, he had not yet done so and the judge ultimately found the factors favouring BC and Alberta to be fairly balanced. The judge determined that BC was the appropriate jurisdiction for the BC Action (“Jurisdiction Decision”).
After the Jurisdiction Decision was issued, the employer’s director, Mr. Krahn, filed an action against the employee and CTA in Alberta pursuant to Alberta’s business corporations legislation (the “Alberta Action”). The result being that the employer had commenced proceedings in both BC and Alberta involving this employee.
The employee then appealed the Jurisdiction Decision. He asked the Court of Appeal to consider the new evidence of the Alberta Action. The Court of Appeal noted that new evidence is generally not admissible, absent exceptional circumstances. In this instance, the Court of Appeal decided to consider the new evidence of the Alberta Action.
Ultimately, the new evidence impacted the analysis of the appropriate forum. The Court of Appeal found that the Alberta Action was related to the BC Action, and there was a potential for conflicting findings on central issues in both actions. Also, the employer acknowledged during the appeal that the Alberta Action was against CTA, which was an Alberta Corporation, and brought pursuant to Alberta’s business corporations legislation, and must be heard by the Alberta Court of King’s Bench. The Court of Appeal found that the Alberta Action tipped the scale in favour of Alberta being the appropriate jurisdiction for the BC Action to be heard.
Key Takeaways
Jurisdictional disputes can cause additional cost and delay for parties seeking to resolve disputes through the court process. Interestingly, this case shows how the initiation of proceedings in multiple forums can have implications on the court’s analysis of the appropriate forum for a particular action. This case also demonstrates that a well-drafted forum selection clause may help limit the risk of a costly preliminary dispute over jurisdiction.
If you have any questions regarding this article, please contact your Harris lawyer.
