In this decision, the British Columbia Court of Appeal (BCCA) upheld the lower court's decision that there was a real and substantial connection between British Columbia and the allegations of criminal anti competition conspiracy advanced in this proposed class action, demonstrating the willingness of courts to take jurisdiction even in cases where the alleged activities of mining companies appear far remote from the harm alleged to have been suffered. Although decided under British Columbia's Court Jurisdiction and Proceedings Transfer Act (Act), the principles underlying the Act are similar to those recently adopted by the Supreme Court of Canada (SCC) in Van Breda (see below).
The allegation made by the plaintiff in this action is that the defendants conspired with one another to drive up the price of gem grade diamonds sold in Canada and British Columbia, thereby causing harm to consumers.
In challenging the jurisdiction of British Columbia courts to hear the action, the defendants asserted that they do not carry on business in British Columbia and that they are not involved in the sale of gem grade diamonds. Rather, their involvement is higher in the "diamond pipeline" as sellers of rough diamonds to "sightholders." The only defendant with operations in British Columbia is DeBeers Canada, a mining company that only began producing diamonds after the proposed class action was commenced. None of this evidence was persuasive for the BCCA.
The British Columbia "connections" relied upon by the plaintiff were that the plaintiff (and other members of the proposed plaintiff class) resides in British Columbia, and that the defendants, by conspiring to keep the price of gem grade diamonds artificially high, affected purchasers in British Columbia, including the plaintiff.
The BCCA noted that pursuant to the Act (which is consistent with the common law as recently confirmed in Van Breda), the first connection, without more, does not give rise to the presumption of a real and substantial connection.
However, the second alleged connection (i.e., that there was a tort (of conspiracy) committed in British Columbia) would be sufficient for jurisdiction to be presumed. In this regard, the plaintiff relied upon the SCC's decision in Moran v. Pyle National (Canada) Ltd. (Moran) for the proposition that the tort was committed in British Columbia because that is where the plaintiff alleges the damage to have been suffered. The BCCA agreed, finding that the plaintiff had pleaded sufficient jurisdictional facts for there to be a real and substantial connection with British Columbia.
In reaching its conclusion, the BCCA acknowledged the defendants' concerns about participating in an action in a jurisdiction that seldom, if ever, figures in their decision-making, but preferred the "important interest a state has in injuries suffered by persons within its territory" as noted by the SCC in Moran.
The British Columbia Supreme Court's (BCSC) decision on this matter (indexed as 2011 BCSC 705) was reported in Mining in the Courts, Vol. II.
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