[1]               This is an appeal of a Queen’s Bench ruling upholding a Master’s decision which held that the Alberta Courts have jurisdiction over a claim of personal injury suffered by the respondents while vacationing at the appellants’ hotel property located in Mexico. The appellants do not question the determination in the lower courts that Alberta, rather than Mexico, is the more convenient forum for the action. Rather, the issue is whether the Alberta courts have jurisdiction on the basis of a real and substantial connection between the respondents and the appellant hotel owner. The appellants maintain that it is unreasonable for a foreign defendant who has not involved itself in any contract made outside of its own country to be called upon to answer proceedings in Alberta. Were it otherwise, the appellants argue that such defendants would be subject to “universal jurisdiction” based solely on the residency of a plaintiff, contrary to private international law.

[2]               The factual underpinnings are the following: The respondents Kerry and Todd Toews who reside in Edmonton, purchased an all-inclusive family vacation at the appellants’ hotel in Mexico (the “holiday contract”). The purchase was made online on the website of Selloffvacations.com. The booking confirmation and itinerary originated with “Signature Vacations” whose standard form, terms and conditions provided that any disputes in relation to the travel package would be determined by arbitration in accordance with the laws of Ontario.

[3]               The hotel is owned by Desarrollos Dine S.A. de C.V. (“Desarrollos”). That company contractually agreed with Dominican Entertainment (“Dominican”) to allot a block of all-inclusive rooms to Dominican to sell to its clients. Dominican’s clients are tour operators located worldwide. Both Desarrollos and Dominican are wholly owned subsidiaries of a third corporation located in the Netherlands.

[4]               Dominican then entered into a contract with Signature Vacations of Mississauga Ontario to market and re-sell the rooms in the hotel to Canadian customers including Albertans. Selloffvations.com is a trade name for Signature Vacations and Signature Vacations is a division of First Choice Canada Inc. (“First Choice”).

[5]               Ms. Toews swallowed a portion of an unmarked, unlabeled water bottle in the fridge of their hotel room. It turned out to be a cleaning substance which burned her esophagus and resulted, following emergency medical treatment, in 87 surgical procedures.

[6]               The respondents brought an action against First Choice, the appellant Palladium and its owner Desarrollos, and others in Alberta, for breach of contract and implied warranties, negligence and other common law duties.  In its statement of defence, First Choice admitted that its contract with the Toews was governed by the laws of Alberta. First Choice ultimately entered into a Mary Carter Agreement with the Toews admitting that both Signature Vacations and Selloffvacations.com were trade names of First Choice, registered and carrying on business in Alberta. First Choice admitted that it had been properly served in Alberta, had attorned to the jurisdiction of Alberta, and acknowledged that the Toews contract with First Choice was made in Alberta, and that there is a “real and substantial connection” between Alberta and the facts upon which the action is based.

[7]               The appellant Desarollos filed an application for a stay of the action for lack of jurisdiction or, alternatively, a finding that Mexico is the proper forum. On December 19, 2014, the Master dismissed the application in a lengthy written decision and found that Alberta had jurisdiction in the action and was the more convenient forum of the action. The decision was based predominantly on what was found to be a “real and substantial connection” between the Toews claim and contracts made in Alberta that relate to that claim, in keeping with the law set out by the Supreme Court in Van Breda v. Village Resorts Ltd., 2012 SCC 17. She also found that a real and substantial connection was established through Rule 11.25(3)(b), which similarly provides the same “presumption” of connection where a contract is made, preformed or breached in Alberta.

[8]               On March 4, 2016, a Queen’s Bench judge upheld the decision of the Master on both findings relating to jurisdiction (Van Breda and Rule 11.25(3)(b)) and again confirmed that Alberta was the most convenient forum for the action. In particular, at paras. 37-46, the court determined that both the booking contract and the holiday contract were made in Alberta, and that the appellants’ argument that they were not a party to either contract was not persuasive. He reasoned that there is no requirement of privity of contract as long as the contract is properly connected to the action (as was the case in Van Breda) and that the term “connected” is to be given a broad meaning. Further, the Queen’s Bench judge found that the only reason Ms. Toews was in the hotel room where she consumed the unknown substance, was because of the holiday contract and the only reason First Choice could enter into the holiday contract, was because of the booking contract. Both were made in Alberta, “relate to” or are “connected with” the action, and connect the appellants to the action. Further, he ruled there is no requirement that the appellants carry on business in Alberta to raise this connection. Lastly, the Queen’s Bench judge found that there was both a “real and substantial connection” between the appellants and the action resulting from the contracts made in Alberta, both under the Van Breda factors and Rule 11.23(3)(d). He considered that there was no need to address the interpretation or applicability of Rule 11.25(3)(i), i.e. if the appellants were “necessary and proper part[ies] to the action  brought against another person”, namely First Choice in Alberta.

[9]               Although Rule 11.25(3) of the Alberta Rules of Court is arguably engaged, the appeal is capable of adjudication on the basis of the Van Breda “real and substantial connection” test alone. Indeed, Rule 11.25(3) expressly adopts the jurisdictional standard of a “real and substantial connection.” What is required is a claim which “relates to” or is “connected with” a contract made in Alberta. In Van Breda Lebel, J. recognized that a presumptive connecting factor exists where a contract connected with a dispute was made in the Province.

[10]           The Toews advanced claims in both contract and tort against all defendants. The position of the respondents is that negligence flows directly from the chain of contracts a number of which were made in Alberta. This satisfies the test. Put another way, but for the chain of related contracts, the Toews would not have stayed at Palladium and the tort could never have occurred.

[11]           The respondents rely upon a more recent decision of the Supreme Court of Canada in Lapointe where the proposition that all that is required is a connection between the claim and a contract that was made in the province where jurisdiction is sought to be assumed. That decision was not available to the Master, nor to the Queen’s Bench judge. The Court reaffirmed:

[12]           The respondents maintain that the contract between Toews and First Choice and the contract between First Choice and Palladium, or in the alternative between First Choice and Dominican, are all governed by the laws of Canada/Alberta. The respondents argue (at para. 43 of the Respondents’ Factum):

[13]           We agree. The appeal must be dismissed.