Canstar Restorations Limited Partnership v. DKI Canada Ltd.

2021 BCSC 951 Canstar Restorations Limited Partnership v. DKI Canada Ltd. IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Canstar Restorations Limited Partnership v. DKI Canada Ltd., 2021 BCSC 951 Date: 20210519 Docket: S208499 Registry: Vancouver Between: Canstar Restorations Limited Partnership Plaintiff/Respondent And DKI Canada Ltd. Defendant/Applicant Corrected Judgment: The text of the judgment was corrected in the citation on the cover page and in the header of each subsequent page on November 12, 2021. Before: The Honourable Madam Justice D. MacDonald Reasons for Judgment Counsel for the Plaintiff via teleconference: J. Horswill S. Robertson Counsel for the Defendant via teleconference: D. Gruber A. Arora Place and Dates of Hearing: Vancouver, B.C. February 25 and March 30, 2021 Place and Date of Judgment: Vancouver, B.C. May 19, 2021 Table of Contents I. OVERVIEW.. 4 II. BACKGROUND FACTS. 5 Procedural Matter 8 POSITIONS OF THE PARTIES. 8 DKI 9 Canstar 10 IV. ISSUES. 11 V. Preliminary Issue. 12 VI. The Pompey Test. 14 Legal Principles. 14 Z.I. Pompey Industrie v. ECU-Line N.V. 16 Douez v. Facebook Inc. 17 What Can Courts Consider at the First Stage of the Pompey Test?. 19 Can Courts Consider the Underlying Facts to Determine the Applicability of Legislation?. 26 VII. What is the Standard of Proof Required at this Stage to Establish the Franchises Act Applies?. 30 VIII. Is there a Reasonable Basis in the Record to establish a Franchise Relationship between the Parties?. 33 Legal Principles. 33 Parties' Arguments. 37 DKI 37 Canstar 38 Analysis. 39 Conclusion on First Stage of the Pompey Test 42 IX. Second Stage of the Pompey Test. 42 X. Should I decline jurisdiction on the basis of forum non conveniens?. 43 Parties' Positions. 43 Legal Principles. 45 Analysis. 47 (a) Convenience, Expense, and Location of Cause of Action. 47 (b) Law to be Applied. 48 (c) Avoiding Multiplicity of Proceedings. 49 (d) Avoiding Conflicting Decision in Different Courts. 49 (e) Enforcement of Eventual Judgment 49 (f) Fair and Efficient Working of the Canadian Legal System.. 49 Conclusion on Forum Non Conveniens. 50 XI. Conclusion. 50 XII. Disposition. 51 I. OVERVIEW [1] The plaintiff/respondent, Canstar Restorations Limited Partnership ("Canstar"), and the defendant/applicant, DKI Canada Ltd. ("DKI"), are both in the restoration business. From 2011 to 2020, they were parties to three agreements under which Canstar paid an initial fee and continuing royalties to DKI (the "Agreements"). In return, Canstar was able to use DKI's trademarks and name. It was also provided with access to a national client base through DKI's relationships with insurers. Both parties agree that, pursuant to the relationship created by the Agreements, Canstar agreed to abide by and comply with DKI's bylaws and policies contained within those bylaws. [2] In May 2020 a dispute arose between the parties and DKI terminated their latest agreement. Canstar brought an action against DKI alleging breaches of contract and breaches of DKI's duty of honest performance at common law, as well as breaches of DKI's duties of good faith and fair dealing under the Franchises Act, S.B.C. 2015, c. 35. DKI subsequently filed a counterclaim for breach of contract. [3] This is an application by DKI pursuant to Rule 21-8 of the Supreme Court Civil Rules [Rules] and s. 11 of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28 [the CJPTA], seeking an order staying Canstar's claim. DKI does not dispute that this Court has territorial competence or jurisdiction simpliciter over the action. However, DKI points to a clause in the Agreements that states the action should be heard in Ontario and the dispute should be subject to Ontario laws (the "Forum Selection Clause"). DKI argues this Court should decline jurisdiction and declare Ontario to be the more appropriate forum based on the Forum Selection Clause. [4] Canstar takes the position that the Agreements between the parties are franchise agreements and therefore the Franchises Act applies. Section 12(1) of the Franchises Act provides: 12 (1) If a provision in a franchise agreement purports to restrict the application of the law of British Columbia or to restrict jurisdiction or venue to a forum outside British Columbia, the provision is void with respect to claims arising under a franchise agreement to which this Act applies. [5] Canstar submits the Forum Selection Clause on which DKI relies is therefore void and does not form part of the Agreements between the parties. DKI asserts that the Agreements do not satisfy the definition of franchise agreements in the Franchises Act, and therefore s. 12(1) does not apply. [6] This is a case of first instance in British Columbia. Although enacted in 2015, s. 12 of the Franchises Act has not been judicially considered. [7] If DKI succeeds in establishing that the Franchises Act does not apply, Canstar accepts that DKI should succeed in its application and these proceedings should be stayed and transferred to Ontario. However, if Canstar establishes the agreement between the parties potentially falls within the definition of a franchise, s. 12(1) of the Franchises Act will apply and the Forum Selection Clause is void. I must then consider whether I should nonetheless decline jurisdiction on the basis of forum non conveniens. [8] For the reasons that follow, I agree the Forum Selection Clause is unenforceable and void pursuant to s. 12(1) of the Franchises Act. I decline to stay the action on the basis of the Forum Selection Clause or on the basis of forum non conveniens. II. BACKGROUND FACTS [9] Canstar is a limited partnership incorporated under the laws of BC. It is headquartered in Coquitlam, BC. Canstar is in the business of residential and commercial building restoration, providing services to clients who have experienced property damage. [10] Canstar provides services directly to clients. Most of its restoration work arises from insured events such as fires or floods. Canstar's most important customers are therefore insurance companies. [11] Canstar has recently attempted to expand its operations into Alberta. It does not operate in Ontario and it has never had a presence in Ontario. [12] DKI, a company registered in Ontario, is also in the restoration business. Instead of providing restoration services directly, it contracts with companies to operate DKI restoration businesses. It collects fees from these companies in return for the use of the DKI brand, provision of a client base, and some assistance. In return, the companies are expected to comply with DKI operating requirements. DKI is a private company run on a not-for-profit basis. [13] In September 2011, Canstar applied to operate two DKI restoration offices in the lower mainland. Canstar wanted access to a more national client base which DKI provided through its relationships with insurers. [14] On November 15, 2011, Canstar's predecessor, Canstar Construction Ltd., entered into several agreements with DKI. These included two trademark license agreements. By virtue of the 2011 Agreements, DKI granted Canstar Construction Ltd. the right to operate DKI restoration businesses in portions of the Lower Mainland, Whistler, and Pemberton, BC. Through these Agreements, Canstar became bound by DKI's bylaws. The 2011 Agreements were for an initial five year term, but both parties agree they were renewed in 2016. [15] On May 18, 2018, DKI granted Canstar the right to operate a DKI office in Abbotsford, BC. The 2011 and 2018 Agreements had the same material terms apart from the marketing territory and the length of term (the 2018 Agreement was for three years). [16] As a result, between November 2011 and May 2020, Canstar operated a DKI restoration business in BC under the name Canstar-DKI. Canstar paid an initial fee and continuing royalties to DKI. In return, Canstar had the privilege of using DKI's name. Canstar also used DKI's trademarks and benefitted from the assistance DKI offered. [17] The Agreements meant Canstar was a member of the DKI Network and had to comply with the DKI bylaws. The bylaws described the arrangements, which included prohibiting Canstar from being a member "of any competing franchise" or having any affiliation with "any other industry franchise." Canstar relinquished control of certain elements of its business to DKI. I will discuss this in more detail below when considering the nature of the relationship between the parties. [18] The Agreements between the parties contained the Forum Selection Clause, which stipulates that the Ontario courts should have exclusive jurisdiction over any disputes and that Ontario law should be applied: Applicable Laws This agreement and the rights, obligations and relations of the parties shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein. The parties agree that the Courts of Ontario shall have exclusive jurisdiction to entertain any action or other legal proceedings based on any provisions of this agreement. Each party hereby attorns to the jurisdiction of the Courts of the Province of Ontario. [19] The Forum Selection Clause both restricts the application of the laws of BC and restricts jurisdiction to a forum outside BC--that forum being Ontario. [20] In May of 2020, Canstar approached DKI to discuss Canstar expanding its operations to Calgary, Alberta, ideally through an arrangement with DKI. If that could not be negotiated, Canstar wanted to market itself in Calgary under its own name, Canstar Restoration. [21] In response, DKI terminated the Agreements between itself and Canstar. DKI allegedly contacted Canstar's clients to inform them of the termination of the agreements. Canstar argues this was designed to cripple its business in favour of DKI and a new franchisee. [22] In the underlying claim, Canstar alleges that DKI's actions violated the notice provisions of the Agreements. In its notice of civil claim, Canstar claims that by terminating the Agreements without notice, and through other actions related to the termination, DKI breached the Agreements. Specifically, Canstar alleges breaches of contract, the duty of honest performance, and DKI's obligations of good faith and fair dealing owed under the Franchises Act. Procedural Matter [23] Canstar supplemented the record with a rebuttal affidavit which provides further details about the parties' relationship. Pursuant to R. 8-1(14) of the Rules, the respondent needs leave to rely on the affidavit as it was served after DKI had served its responding affidavit pursuant to R. 8-1(13). The parties agreed that I could hear the substance of the application prior to deciding whether leave should be granted. If I agree with the legal framework DKI presents, leave should be denied because the affidavit will be irrelevant. If I agree with the legal framework advanced by Canstar, leave should be granted as the underlying facts regarding the parties' relationship will be relevant. [24] Given that I agree with the legal framework advanced by Canstar, as detailed below, I grant leave for the affidavit to be accepted into evidence. POSITIONS OF THE PARTIES [25] The parties agree that the validity of forum selection clauses is governed by the common law test, not by the forum non conveniens analysis as codified in s. 11 of the CJPTA: Douez v. Facebook, Inc., 2017 SCC 33 at para. 17 [Douez]. They agree there is a two-stage test as set out in Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27 [Pompey] and Douez at paras. 28-29: 1. DKI must establish the Forum Selection Clause is "valid, clear and enforceable and that it applies to the cause of action before the court." 2. If so, Canstar must show "strong cause" why the Forum Selection Clause should not be enforced. [26] I refer to this test as the "Pompey test". [27] The parties are in agreement that the Pompey test is applicable to this situation. They disagree, however, on three main points: (1) at what stage of the Pompey test I may consider the applicability of s. 12(1) of the Franchises Act; (2) to what standard of proof I must be convinced of the applicability of s. 12(1) of the Franchises Act for the purposes of this jurisdictional application; and (3) to what extent I can consider evidence regarding the relationship between the parties in determining the applicability of s. 12(1) of the Franchises Act. DKI [28] DKI argues that this Court should give effect to the Forum Selection Clause and transfer the action to Ontario. [29] DKI takes the position that I cannot examine the merits regarding whether the Franchises Act applies at the first stage of the Pompey test. As long as the Forum Selection Clause is valid, clear, and enforceable, and applies to the cause of action, the burden shifts to Canstar to show "strong cause" why this Court should not give effect to the clause. To the extent that previous cases have considered the enforceability under the first stage, they were construing the agreement between the parties. In other words, it was an issue of construction, not a rule of law. DKI argues it is only at the second stage (where the burden is on Canstar to show the clause should not be enforced) that I may consider s. 12(1) of the Franchises Act. DKI points out that Canstar has conceded it cannot prove strong cause. [30] DKI further argues Pompey establishes that courts are not to delve into the merits on a motion to stay, and therefore that I am not to consider whether the Franchises Act applies to the parties. [31] DKI argues in the alternative that if I can consider the Franchises Act at the first stage of the Pompey test, the "reasonable basis on the record" standard, on which Canstar relies, is not the correct standard to apply. The only case which has applied this standard is Di Stefano v. Energy Automated Systems Inc., 2010 ONSC 493. Di Stefano is contrary to Pompey in that it improperly considers the merits of the action. [32] In the further alternative, DKI argues there is no reasonable basis on the record that a franchise relationship exists between the parties, and therefore the parties are not subject to the Franchises Act. DKI points to a discussion recorded in the Hansard debates to support its argument that s. 12 of the Franchises Act was not meant to apply to sophisticated parties such as Canstar. Additionally, DKI did not exercise significant control over Canstar, and it did not offer significant assistance with respect to its methods of operation such that the relationship does not meet the definition of "franchise" in the Franchises Act. [33] Lastly, DKI argues that if the Forum Selection Clause is void due to the operation of s. 12(1) of the Franchises Act, this Court should nonetheless decline jurisdiction on the basis of forum non conveniens, based on the factors set out in s. 11 of the CJPTA. Canstar [34] Canstar argues that to answer the first stage of the Pompey test, this Court must consider the applicability of s. 12(1) of the Franchises Act. The Franchises Act states that a provision in a franchise agreement which restricts the application of the laws of BC or jurisdiction of BC courts is void with respect to claims arising under a franchise agreement. Canstar argues that the Franchises Act applies and is a necessary component of the first stage since the Franchises Act determines whether the Forum Selection Clause is enforceable. [35] Canstar contends the applicable test on this application is whether there is a "reasonable basis on the record" to establish that the Agreements fall in the definition of "franchise agreement" in the Franchises Act. Canstar says that the record discloses a reasonable basis to establish a franchisor/franchisee relationship and DKI has therefore failed to discharge its burden of showing that the Forum Selection Clause is enforceable at stage one of the Pompey test. [36] Canstar argues if I find the Forum Selection Clause is void, I must then consider whether the Court should decline jurisdiction on the basis of forum non conveniens under s. 11 of the CJPTA. Canstar argues that the factors favouring BC as the appropriate forum far outweigh the factors favouring Ontario. Therefore, this Court should not decline jurisdiction and stay Canstar's action. [37] Canstar conceded in argument that if I conclude DKI has discharged its burden at the first stage of the Pompey test to show the Forum Selection Clause is valid, clear, enforceable, and applicable to the cause of action, Canstar cannot show strong cause not to enforce it and DKI's stay application must succeed. IV. ISSUES [38] This application raises the issue of whether this Court should stay Canstar's action and decline to exercise jurisdiction. To answer this question I must determine the following: (1) Do I consider the Franchises Act at the first or second stage of the Pompey test? (2) Can I consider the underlying facts to determine whether the Franchises Act applies at this jurisdictional stage, or would that assessment require impermissible delving into the merits of the action? (3) What is the standard of proof that must be met at this jurisdictional stage with respect to whether the Franchises Act applies; i.e. is it a "reasonable basis on the record" or some other standard? (4) Does s. 12(1) of the Franchises Act apply here (considering the standard of proof determined above) such that the Forum Selection Clause is void? (5) If the Forum Selection Clause is valid, is there strong cause as to why it should not be enforced? (6) If the Forum Selection Clause is void, should this Court nonetheless decline jurisdiction on the basis of forum non conveniens under s. 11 of the CJPTA? V. Preliminary Issue [39] Before proceeding to the issues outlined above I will consider the preliminary issue raised by DKI: that regardless of the specifics of the relationship between the parties or the burden applied, the Franchises Act was not intended to apply to sophisticated parties like Canstar and DKI. I am addressing this question at the outset because if the Franchises Act does not apply at all, other aspects of the application are irrelevant. [40] DKI argued the Franchises Act does not apply because, as was evident during the Hansard debates, the intended purpose of the legislation is to prevent large businesses from dominating small businesses. Here no such power imbalance or vulnerability is present between the parties. DKI points particularly to its not-for-profit goal, the opportunities for input its member companies have with respect to policies and bylaws, and Canstar's relative business sophistication. [41] Hansard debates can provide helpful insight into the background and purpose of legislation. As Justice Dardi observed in Lougheed Estate v. Wilson, 2017 BCSC 1366, rev'd on other grounds 2018 BCCA 441: [603] In Dagg v. Canada (Minister of Finance), [1997] 2 S.C.R. 403 at para. 49 the Supreme Court of Canada endorsed the notion that evidence of a statute's history, including excerpts from Hansard, is admissible as relevant to the background and purpose of the legislation, provided, of course, that the court approaches the evidence cautiously and remains mindful of its limited reliability and weight: R. v. Morgentaler, [1993] 3 S.C.R. 463 at p. 483-85; Jiang v. Peoples Trust Company, 2017 BCCA 119 at para. 50. [42] DKI pointed to a portion in the Hansard debates which states "[a]s I said, I think the most important piece for me is to remember that often the relationship between the franchisor and the franchisee can be an unequal relationship."[1] Not only is this only part of one speech of one proponent of the bill, it expressly uses the word "often"--indicating that there can be franchise relationships that do not have such a power imbalance. [43] The Hansard debates are not determinative of the issue as they are to be given limited weight. In any event, I do not read the debates to say the profit goals or the sizes of businesses were distinguishing features identified by the legislature when passing s. 12 of the Franchises Act. Although it is true that there are many references to power imbalances and creating an equal playing field in the Hansard debates, it was acknowledged that franchises exist across the spectrum of business sectors in Canada. There was no indication that the Franchises Act is not meant to apply in situations where there is no power imbalance. [44] The factors which go to establishing a franchise relationship, as will be discussed later in this decision, are the degree of control over and assistance provided to the potential franchisee, not the size or structure of the respective businesses. This is reflected numerous times in the Hansard debates, which describe franchise relationships as "profoundly intertwined and symbiotic"[2] relationships, where "franchises are all run the same way by the parent company"[3] and "the franchisor reserves significant control over the business".[4] [45] If the legislature intended to exempt businesses of a certain size or sophistication from the application of the Franchises Act, it could have done so. In fact, there is an exception from certain disclosure requirements for a grant of a franchise if the franchisee is investing more than the prescribed amount (currently $5 million): Franchises Act, s. 5(8)(i); Franchises Regulation, B.C. Reg. 238/2016, s. 10. The Hansard debates indicate this exception was included because "in these situations, the franchisee is a sophisticated party with legal and financial advisers. They are not the typical franchisees that need the protection of the [Franchises Act]."[5] I note this is only an exception from disclosure requirements and does not exempt such franchise relationships from the application of the rest of the Franchise Act. This suggests that the size or sophistication of a franchisee was not intended by the legislature to determine the application of the Franchise Act. [46] I am not persuaded by DKI's arguments that the Franchises Act is not intended to apply in the current situation merely based on the sophistication or size of the parties. I dismiss DKI's argument on this issue. [47] Further, the Hansard debates provide some insight into the purpose of s. 12(1) of the Franchises Act specifically. The debates provide an example of the very situation here: a BC-based franchisee having to pursue the case in Ontario: Also interesting, I would argue, and very important, is the requirement under the act, of course, for financial disclosure but also that the governing law and [forum] provisions come back to British Columbia. I met with a franchisee in dispute with a franchisor -- and usually these disputes arise at a time of difficulty in the business -- who had to pursue his case in Ontario, even though everybody involved lived in British Columbia. The cost and consequence of that means that to seek legal remedy under those circumstances is very difficult.[6] [48] I will consider the Hansard debates around the purpose of s. 12 as I move on to the other issues in this case. When doing so, I remain mindful of Hansard's limited reliability and weight. VI. The Pompey Test Legal Principles [49] The parties agree the Pompey test (also at times referred to as the "strong cause" test although that is really only the second stage of the test) determines the applicability of a forum selection clause. First, the party seeking the stay must establish the forum selection clause is "valid, clear and enforceable and that it applies to the cause of action before the court." Second, if the clause meets the first test, the onus shifts to the party opposing the stay to show "strong cause" why the court should not enforce the forum selection clause and stay the claim: Pompey; Douez at paras. 28­-29, citing Preymann v. Ayus Technology Corporation, 2012 BCCA 30 at paras. 43-44. [50] The oft-cited source of the "strong cause" test is Owners of Cargo Lately Laden on Board Ship or Vessel Eleftheria v. Owners of Ship or Vessel Eleftheria, [1969] 2 All E.R. 641 at 645, [1969] 2 W.L.R. 1073 (P.D.A. Div.) [The Eleftheria]. The strong cause test was affirmed by the Supreme Court of Canada in Pompey. Justice Bastarache explained the difference between the first and second stages: [31] The "strong cause" test, once it is determined that the bill of lading otherwise binds the parties (for instance, that the bill of lading as it relates to jurisdiction does not offend public policy, was not the product of fraud or of grossly uneven bargaining positions), constitutes an inquiry into questions such as the convenience of the parties, fairness between the parties and the interests of justice, not of the substantive legal issues underlying the dispute. [51] The first stage of the test typically applies contractual principles but also includes public policy considerations. The second stage of the test includes the following non-exhaustive factors, listed in Pompey at para. 19: (a) The country in which evidence is situated or more readily available, and the effect of that on the relative convenience and expense of a trial in each jurisdiction; (b) Whether the law of the foreign court applies and whether it differs in material respects from domestic law; (c) The connection of the parties to each jurisdiction and the degree of that connection; (d) Whether the defendant has a genuine desire for trial in the foreign jurisdiction as opposed to pursuit of a procedural advantage; and (e) Whether the plaintiff would be prejudiced by having to claim in another jurisdiction, they would be unable to enforce a judgment, they would be faced with a time-bar not imposed at home, or they would be unlikely to have a fair trial. [52] There are two cases decided by the Supreme Court of Canada which contain a detailed analysis of forum selection clauses: Pompey itself, decided in 2003, and Douez, decided in 2017. I will review each case before proceeding to determine how they apply to the issues before me. Z.I. Pompey Industrie v. ECU-Line N.V. [53] Pompey involved sophisticated commercial parties contracting for the shipment of cargo pursuant to a bill of lading. The bill of lading contained a choice of law and forum selection clause in favour of the courts of Antwerp, Belgium. Under the bill of lading the cargo originated in Antwerp and was to be shipped to Seattle. The cargo was in fact shipped from Antwerp to Montreal and then transported by rail from Montreal to Seattle. Upon arrival in Seattle, the cargo was damaged. [54] The plaintiff filed a claim in the Federal Court of Canada alleging the cargo was damaged while in transit by rail. The defendant sought a stay of proceedings based on the forum selection clause. There was a somewhat complex judicial history, as outlined by Bastarache J. at paras. 7­-16, with the lower courts debating which test should govern the application: the "strong cause" test from The Eleftheria or the tripartite test for an interlocutory injunction from RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R. 199, 127 D.L.R. (4th) 1. Ultimately, the Supreme Court of Canada determined the "strong cause" test should govern. The tripartite test was seen as inappropriate because it ignored the importance of holding parties to their bargain and required the Court to engage with the merits of the underlying action in determining whether there was a "serious case to be tried". [55] Upon application of the Pompey test, the Court agreed with the defendant and stayed the claim. It concluded that the plaintiff had not shown "strong cause" not to enforce the clause. In staying the claim, the Court noted that forum selection clauses are common components of international commercial transactions. When applying the Pompey test, the Court emphasized certainty, order, and fairness. It reinforced the importance of holding commercial parties to their bargains. [56] Despite the ultimate ruling in Pompey, the Supreme Court of Canada specifically recognized that legislatures may override forum selection clauses: at para. 39. In Pompey, s. 46(1) of the Marine Liability Act, S.C. 2001, c. 6, had been enacted subsequent to the lower court decision but it did not apply retroactively. At para. 37, the Court explained that the Marine Liability Act would, in future disputes, have the effect of overriding forum selection clauses in favour of the Federal Court, assuming the requirements of s. 46 were met. [57] There is one other aspect of the Pompey decision to which the parties referred and which I will mention briefly at this juncture. Part of the underlying claim by the plaintiff was that the defendants had fundamentally breached the contract by wilfully breaching a key term (by transporting the goods by rail instead of by ship). The prothonotary at the court of first instance had determined, after concluding the strong cause test had not been met, that the forum selection clause did not apply because the entire contract was void due to this alleged fundamental breach. The Supreme Court of Canada determined this was an error because it required an inquiry into the substantive legal issues within the underlying dispute: at paras. 30­-32. The Court summarized the inappropriateness of the prothonotary's approach: [31] [A] court, in the context of an application for a stay to uphold a forum selection clause in a bill of lading, must not delve into whether one party has deviated from, or fundamentally breached an otherwise validly formed contract. Such inquiries would render forum selection clauses illusory since most disputes will involve allegations which, if proved, will make the agreement terminable or voidable by the aggrieved party. Douez v. Facebook Inc. [58] Another important case with respect to the common law test for forum selection clauses is Douez. Douez is complicated because there was a divided court. The majority decision was written by Justices Karakatsanis, Wagner, and Gascon, with Justice Abella concurring in the result. There was a dissenting judgment by Chief Justice McLachlin and Justices Côte and Moldaver. [59] Douez concerned the enforcement of a forum selection clause in a standard form contract between Facebook and its BC customers. When Canadians join Facebook they must, by clicking an electronic box, agree to its terms of use as part of the registration process. This includes a forum selection and choice of law clause requiring that all disputes will be resolved in California and governed by California law. [60] The plaintiff brought a claim against Facebook in BC Supreme Court under s. 3(2) of the Privacy Act, R.S.B.C. 1996, c. 373. Section 3(2) provides that it is a tort to use the name or portrait of another for advertising or promotion without that person's consent. [61] Facebook brought an application to stay the action on the basis of the forum selection clause. In response, the plaintiff argued the forum selection clause should not be enforced because s. 4 of the Privacy Act rendered it unenforceable or, alternatively, because there was "strong cause" not to enforce it. Section 4 reads: Despite anything contained in another Act, an action under this Act must be heard and determined by the Supreme Court [of British Columbia]. [62] After confirming that s. 11 of the CJPTA did not replace the Pompey test for forum selection clauses, the majority proceeded to the "application" section of the decision. First, the majority held that although legislative provisions can override forum selection clauses, s. 4 lacked the "clear and specific language" to do so. Second, the majority held the forum selection clause was otherwise enforceable under the first stage of the Pompey test. [63] However, the majority found strong cause not to enforce the forum selection clause under the second stage. The majority characterized forum selection clauses as a unique category of contracts. They do not simply affect the parties to the contract because they encroach on the "public sphere of adjudication": Douez at para. 27. They also "divert public adjudication of matters out of the province, and court adjudication in each province is a public good": Douez at para. 25. Ultimately, the clause could not be enforced because it was a consumer contract of adhesion, was unconscionable, and the statutory cause of action implicated quasi-constitutional privacy rights: at para. 50. The majority distinguished Pompey, and the need for certainty and security in commercial contracts, on the basis of the unequal bargaining power between the parties. [64] Justice Abella, concurring in the result, held that the forum selection clause was unenforceable at the first stage of the Pompey test. Despite her concern about the power imbalance between the parties,[7] the focus of Abella J.'s decision was whether the forum selection clause was enforceable in light of s. 4 of the Privacy Act. She found it was not. The forum selection clause was void as a result of the legislation. She expressly disagreed with the majority in their interpretation of s. 4 and found there was a legislative grant of exclusive jurisdiction that overrode the forum selection clause. [65] The dissenting Justices determined the forum selection clause was enforceable and there was no strong cause not to enforce it. With respect to s. 4 of the Privacy Act, the dissenting Justices agreed with the majority that the language of s. 4 was not clear enough to render the forum selection clause unenforceable. The dissenting Justices would have stayed the action. What Can Courts Consider at the First Stage of the Pompey Test? [66] The parties agree that, in the case before me, the first stage of the Pompey test is satisfied, apart from the question of enforceability. Canstar agrees the Forum Selection Clause is valid, clear, precise, and otherwise applies to the action. [67] The question before me is whether s. 12(1) of the Franchises Act operates to invalidate the Forum Selection Clause. I must first determine if the applicability of the Franchises Act is to be considered at the first or second stage of the Pompey test. [68] Canstar argues I must consider the applicability of the Franchises Act at the first stage of the Pompey test because if it applies, s. 12(1) renders the Forum Selection Clause void and therefore unenforceable or inapplicable. Canstar argues the burden should be on the party seeking the stay to establish the clause is not voided by legislation, just as that party has the burden to show the clause is valid with respect to unconscionability, undue influence, or fraud. [69] DKI relies on Pompey to state that I cannot consider evidence at the first stage of the test, and therefore it would be inappropriate to consider the applicability of the Franchises Act at the first stage. Based on contractual principles, DKI argues the Forum Selection Clause is valid, clear, and precise. It is not rendered unenforceable under the contractual doctrines of duress, fraud, or unconscionability. DKI argues I can consider s. 12(1) of the Franchises Act under the second stage of the test, when the burden is on the plaintiff to show strong cause not to enforce the Forum Selection Clause, but again the underlying facts are inadmissible. [70] I agree the Forum Selection Clause is valid, clear, and precise. I am not addressing a consumer contract of adhesion or a situation where the clause may be unenforceable under the contractual doctrines of duress, fraud, or unconscionability. [71] The key Supreme Court of Canada authorities on this issue are the Pompey and Douez decisions. In Pompey, the Court noted that s. 46(1) of the Marine Liability Act did not apply to the case because it had been enacted after the judicial proceedings had commenced. I note the similarities between s. 12(1) of the Franchises Act and s. 46(1) of the Marine Liability Act. Section 46(1) reads: 46 (1) If a contract for the carriage of goods by water to which the Hamburg Rules do not apply provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada, where (a) the actual port of loading or discharge, or the intended port of loading or discharge under the contract, is in Canada; (b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or (c) the contract was made in Canada. [72] For convenience, I will set out s. 12(1) of the Franchises Act again: 12(1) If a provision in a franchise agreement purports to restrict the application of the law of British Columbia or to restrict jurisdiction or venue to a forum outside British Columbia, the provision is void with respect to claims arising under a franchise agreement to which this Act applies. [73] Notably, both sections expressly contemplate a contractual provision which dictates adjudication in another jurisdiction. On that point, in fact, the language in the Franchises Act is stronger than that of the Marine Liability Act in Pompey. The language in the Marine Liability Act is permissive, not mandatory. It provides that a claimant "may" bring the claim, not that the claimant "must". Despite this, the Court in Pompey indicated that s. 46(1) would remove the discretion of the Federal Court to stay a proceeding on the basis of a forum selection clause if s. 46(1) applied (i.e., if one of the requirements in (a)-(c) was met): at para. 37. [74] In Pompey, Bastarche J. noted a different test may be applied, or that the Pompey test could be modified, where there is a statutory conferral of jurisdiction. However, he did not provide any clear statements as to when potentially applicable legislation should be considered within the analysis. I note that when summarizing the test to apply, Bastarache J. mentions applicable legislation prior to discussing either stage of the test applied in The Eleftheria: [39] [I]n the absence of applicable legislation, for instance s. 46(1) of the Marine Liability Act, the proper test for a stay of proceedings pursuant to s. 50 of the Federal Court Act to enforce a forum selection clause in a bill of lading remains as stated in The "Eleftheria" Once the court is satisfied that a validly concluded bill of lading otherwise binds the parties, the court must grant the stay unless the plaintiff can show sufficiently strong reasons [not to]. [Emphasis added.] [75] In Douez, s. 4 of the Privacy Act had been enacted prior to the cause of action arising. Section 4 of the BC Privacy Act provides: "Despite anything contained in another Act, an action under this Act must be heard and determined by the Supreme Court [of BC]". [76] In Douez, the majority held that s. 4 lacked the "clear and specific language that legislatures normally use to override forum selection clauses": at para. 43. The Privacy Act was silent on contractual provisions and did not expressly refer to forum selection clauses. The dissent agreed on this point, stating "nothing in the language of s. 4 suggests that it can render an otherwise valid contractual term unenforceable": at para. 142. The dissent went further, stating that if "the legislature had intended to render forum selection clauses inoperable for claims made under the Privacy Act, it would have said so expressly": at para. 144. [77] Notably, the entire Court in Douez (the majority, concurrence, and dissent) recognized that, as stated in Pompey, legislative provisions can override forum selection clauses and render them unenforceable: at paras. 41, 108, and 143. While neither the majority nor dissent addressed at what stage of the Pompey test courts should consider applicable legislation, reading the decisions it is clear that both groups of Justices considered s. 4 of the BC Privacy Act either prior to the application of the Pompey test altogether (the majority at paras. 41-44) or within the first stage of the Pompey test (the dissent at paras. 133-135 and 141-144). [78] Justice Abella, in her concurring opinion, also considered s. 4 of the BC Privacy Act under the first stage of the Pompey test: at paras. 107-110. She reasoned that it was contrary to public policy to deprive a party of access to a statute granting exclusive jurisdiction to the BC Supreme Court. She reasoned to decide otherwise would be contrary to the acknowledgement in Pompey at para. 39 that legislation takes precedence over forum selection clauses. Justice Abella did not find the existence of s. 4 to be the only basis to find the forum selection clause unenforceable; Abella J. also referred to public policy, the quasi-constitutional nature of privacy rights, and the fact that the matter before her was a contract of adhesion. [79] The majority in Douez indicated that public policy considerations, which were considered at stage one of the test in Pompey at para. 31, can also arise at stage two. The public policy considerations the majority was referring to are set out in para. 38. The majority explained: When considering whether it is reasonable and just to enforce an otherwise binding forum selection clause in a consumer contract, courts should take account of all the circumstances of the particular case, including public policy considerations relating to the gross inequality of bargaining power between the parties and the nature of the rights at stake. [80] The majority explained the expansion of the second stage on the ground that Pompey "did not set out a closed list of factors governing the court's discretion to decline to enforce a forum selection clause": at para. 30. The Justices emphasized that both Pompey and The Eleftheria acknowledged that courts should consider "all the circumstances" of the case before them. The majority concluded there should be "flexibility" when applying the strong cause factors at the second stage. While there are two separate stages, there may be overlap. [81] I read the majority's opinion in Douez to confirm that public policy is a component of the Pompey test at the first stage, as articulated in Pompey at para. 31. Nevertheless, public policy can also be considered at the second stage of the analysis because it is included in "all the circumstances". Justices Karakatsanis, Wagner, and Gascon stated the following regarding the factors that may be addressed at the second stage: [49] As we note above, in exercising its discretion at this step of the analysis, a court must consider "all the circumstances", including the "convenience of the parties, fairness between the parties and the interests of justice" (Pompey, at paras. 19 and 30-31). As we have said, public policy may also be an important factor at this step (Holt Cargo, at para. 91, referred to in Pompey, at para. 39; Frey, at para. 115). [Emphasis added.] [82] I do not read the majority's decision to suggest that a statutory provision voiding forum selection clauses, a component of public policy, is only to be considered at the second stage of the Pompey test. [83] Another important case is Di Stefano. Although the decision is not binding on me, it is factually similar to the case at bar. The Ontario Superior Court determined that the question of a legislative conferral of jurisdiction inconsistent with a forum selection clause must be determined at the first stage of the Pompey test. [84] In Di Stefano the plaintiffs entered into agreements which contained a forum selection clause specifying that Tennessee law governed and the Tennessee courts had exclusive jurisdiction over any dispute between the parties. The plaintiffs brought claims for breaches of disclosure requirements and false representations pursuant to the Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3. [Wishart Act]. The defendants sought a stay, relying on the forum selection clause in the agreements. [85] The Wishart Act and the Franchises Act are very similar.[8] The plaintiffs in Di Stefano relied on s. 10 of the Wishart Act in arguing the forum selection clause was void: Attempt to affect jurisdiction void 10 Any provision in a franchise agreement purporting to restrict the application of the law of Ontario or to restrict jurisdiction or venue to a forum outside Ontario is void with respect to a claim otherwise enforceable under this Act in Ontario. [86] Justice Code found that the plaintiffs in Di Stefano did not meet strong cause, stage two of the Pompey test, based on the traditional factors. Those factors are somewhat broader today because Di Stefano was decided prior to Douez. [87] Importantly, Code J. held that the strong cause test was not the real issue. Citing Pompey at paras. 24, 31, and 38-39, Code J. held that where there is applicable legislation, the defendant has a preliminary burden to persuade the court that the forum selection clause applies and that the legislation does not apply: at paras. 19­-22. Justice Code expressly stated the defendant had this burden "before the burden shifts to the plaintiff to show 'strong cause'" at stage two of the Pompey test: at para. 19. [88] Based on Pompey, Douez, and Di Stefano, I conclude legislation restricting jurisdiction is to be considered at the first stage of the analysis. DKI did not direct my attention to any cases where such legislation was considered at the second stage. [89] I do not consider it necessary to decide whether consideration of the legislation occurs within the first stage of the Pompey test or immediately prior to it. In either case the burden to show the legislation does not apply is on the party seeking to enforce the forum selection clause. In my view it is appropriate to consider s. 12(1) in this case within the first stage, in answering the question of whether the Forum Selection Clause is "valid, clear and enforceable". The Forum Selection Clause here is not enforceable if it is void due to a statutory conferral of jurisdiction to this Court. [90] I agree with Abella J. in Douez that to ignore potentially applicable legislation when considering enforceability would be contrary to the reasoning in Pompey that legislation takes precedence over forum selection clauses. I may therefore consider s. 12(1) of the Franchises Act when determining the enforceability of the Forum Selection Clause before proceeding to the second stage of the Pompey test. To decide otherwise would be contrary to public policy. [91] Like Ontario, in BC the legislature has chosen to facilitate access to the BC Supreme Court for franchise businesses operating in BC. If a franchise relationship exists, the Franchises Act overrides the Forum Selection Clause. [92] There remains the issue of whether the Franchises Act applies to the parties. If not, then s. 12 does not apply and the Forum Selection Clause is not voided. That was the ultimate conclusion of Code J. in Di Stefano: at para. 28. Answering this question raises two further issues. First, can courts consider the underlying facts (here, facts which go to whether the Agreements are "franchise agreements" as defined in the Franchises Act) at this jurisdictional stage? Second, what is the standard of proof required at this early stage? Can Courts Consider the Underlying Facts to Determine the Applicability of Legislation? [93] DKI argues that courts are not permitted to consider the underlying facts to determine if the Forum Selection Clause is enforceable at either stage of the Pompey test. It argues that the policy direction of the Supreme Court of Canada in Pompey is that courts must consider whether a forum selection clause is enforceable without undertaking a preliminary analysis of the merits. The contractual expectation that forum selection clauses will be enforced should not be impeded by unproven allegations at this stage of the proceedings. [94] Canstar argues that to fail to consider the underlying facts would nullify s. 12 of the Franchises Act. If the court were to wait to decide whether there is a franchise relationship when the merits are decided, the issue of jurisdiction would be raised too late as the dispute would already be before the Ontario courts. Canstar argues such a result would be contrary to the intent of the legislation. [95] I agree with Canstar that it is clear the intent of s. 12 is to ensure British Columbia franchisees can have their disputes determined in British Columbia. This is evident in the wording of s. 12. I agree that s. 12 would be of little use if, in any situation where there is a dispute about whether the Franchises Act applies, the court adjudicating over a stay application would be unable to consider the underlying facts going to the applicability of the Franchises Act. [96] On the other hand, I recognize that Pompey indicated it would be problematic for a court to consider the merits of the underlying action at the jurisdictional stage. This is clear from the reasoning about the inappropriateness of the tripartite injunction test, where the Court states "the rule governing such stay applications cannot be based on a test that relies on the likelihood of success on the merits": at para. 26. [97] DKI also pointed to paras. 30­-31 where the Court held the prothonotary erred in law by considering the doctrine of fundamental breach and concluding "the forum selection clause was void as a result of the alleged deviation" from the contractual terms. This was an error because the Pompey test is not an inquiry into "the substantive legal issues underlying the dispute." [98] I agree with DKI that a preliminary jurisdiction application is not the appropriate time to consider substantive legal issues at the core of the issues between the parties. However, the case before me can be distinguished from Pompey. In Pompey the prothonotary considered whether there was a fundamental breach of the underlying contract such that the whole contract was void, including the forum selection clause: at para. 31. The question of a serious breach where the whole contract is void, including the Forum Selection Clause, is not at issue here.[9] [99] Moreover, in Pompey the issue of deviation/breach was one of the core substantive legal issues in the underlying action and the prothonotary considered that exact issue on the stay application. In the case at bar, while the application of the Franchises Act is certainly relevant to the underlying action, it does not go precisely to the merits of the action. The central claim appears to be for a breach of contract, which is a claim that does not depend on the application of the Franchises Act. [100] I am not being asked to comment on the likelihood of success on the merits of the underlying action as was the concern in Pompey with the application of the tripartite test. My determination as to whether s. 12(1) of the Franchises Act applies will not have an impact on the ultimate determination of the claims because it is only a preliminary determination, pending the determination on the merits. [101] I am supported in this conclusion by Di Stefano. Although this case is not binding on me, I find the analysis to be helpful. Di Stefano directly addresses DKI's concerns regarding delving into the underlying merits. [102] Justice Code first outlined this problem when considering how to determine the applicability of the Wishart Act: "I am entitled to receive affidavit evidence in order to determine this preliminary question of law. However, the difficulty in this regard is that the preliminary question of law is closely tied up with the merits of the Plaintiff's claim": at para. 22. In Di Stefano the plaintiffs' claims were entirely statutory, in that the plaintiffs claimed for breaches of the Wishart Act by the defendant, but did not make any non-statutory claims such as breach of contract. This made the determination of whether the contracts were franchise agreements "the central issue in the Plaintiffs' law suit": at para. 23. [103] I briefly pause to note that there is a slight difference between s. 10 of the Wishart Act and s. 12(1) of the Franchises Act: the former renders void forum selection clauses "with respect to a claim otherwise enforceable under this Act" while the latter applies "with respect to claims arising under a franchise agreement to which this Act applies." The latter is a deliberate extension of the potential applicability of s. 12(1) of the Franchises Act by the legislature, as explained in Report on A Franchise Act for British Columbia, (Vancouver: British Columbia Law Institute, 2014) at 66 and 104, referring to s. 11 of the Uniform Act: Litigation between franchisees and franchisors that arises in a province or territory having franchise legislation will often involve non-statutory and statutory claims being asserted in the same action. If section 11 applies only to claims based on a breach of statutory duty under the Act, an exclusive jurisdiction or forum clause in a franchise agreement could still operate with respect to non-statutory claims. As a result, a plaintiff might be faced with having to split a case and litigate in two places with all the expense and uncertainty that situation inevitably brings, or else abandon a significant part of the case. This is an undesirable result. It undermines the policy behind section 11, which is to ensure that the Act is applied to franchisor-franchisee disputes arising under franchisees based in the province or territory that enacts it. In British Columbia's version of the uniform Act, the counterpart provision to section 11 should apply to non-statutory as well as statutory claims made by a party to a franchising agreement against the other party. [104] While nothing turns on this difference in the two Acts, in my view, it provides further support for the intention of the legislature to apply the Franchises Act to disputes where franchisees are located in BC, as is Canstar. [105] DKI argues that s. 12(1) of the Franchises Act only applies after it is established there is a franchise agreement but without reference to the underlying facts. I agree with Canstar if that were the test, it would effectively nullify s. 12(1) of the Franchises Act and defeat the intention of the legislature in enacting it. Whenever the existence of a franchise agreement was in dispute, the plaintiff would be unable to adduce any evidence on that point. While there may be many instances where there is no dispute, that does not assist the plaintiff who disputes the characterization of the relationship between the parties but is forced to litigate the issue on the merits in a foreign jurisdiction. [106] In Di Stefano, Code J. resolves the issue of delving too far into the merits by determining the standard to apply is whether there is a "reasonable basis in the record" for the plaintiff to establish that their agreements with the defendant are franchise agreements. Justice Code examined the record utilizing this standard, ultimately finding there was no reasonable basis in the record to find the contracts were franchise agreements. He granted the stay sought by the defendant. [107] In this case there are also non-statutory claims within the action (breach of contract and breach of confidence) and my consideration of the application of the Franchises Act will not impact the merits of those claims. This difference from the claims in Di Stefano provides me with more confidence that I can examine the record for the limited purpose of determining the preliminary question of law before me because an alleged breach of a franchise agreement is not the only issue before the court. [108] Based on the factual circumstances of this case, the specific legislative language of s. 12(1) of the Franchises Act, and the jurisprudence, in my view, I am able to consider the underlying facts in order to make a preliminary determination on whether s. 12(1) of the Franchises Act applies for the purposes of this stay application. VII. What is the Standard of Proof Required at this Stage to Establish the Franchises Act Applies? [109] The last issue for me to determine before considering the facts of the case at bar is the standard of proof required at this jurisdictional stage. As mentioned earlier, in Di Stefano Code J. determined the standard was "a reasonable basis in the record." Canstar urges me to adopt this standard. DKI argues such a standard is contrary to the direction in Pompey to avoid addressing the merits of the claim, a similar argument to the one discussed above. [110] In coming to his conclusion on the standard to be met, Code J. relied on Young v. Tyco International of Canada Ltd., 2008 ONCA 709, to hold that he could undertake a preliminary examination of the underlying facts, even though the jurisdictional dispute was related to the underlying factual dispute in the action. In my view, the following passage from Young, referred to in Di Stefano, discussing the issue of conflicting underlying facts in a forum non conveniens analysis is helpful: [33] But, on some motions -- and this is one of them -- the efficiency and fairness considerations at the heart of the forum non conveniens test will be tied inextricably to the factual issues in dispute. On these motions, the motion judge will have no choice but to address the competing versions put forward by the parties. In doing so, the motion judge should accept the plaintiff's version as long as it has a reasonable basis in the record. Accepting the plaintiff's version where warranted should not inhibit the motion judge from assessing all the evidence in the record and finding facts regarding the forum non conveniens factors themselves. Where the evidence is disputed the party relying on a fact supporting the application of a factor in its favour will bear the evidential burden of establishing that fact: see Frymer v. Brettschneider (1994), 19 O.R. (3d) 60, [1994] O.J. No. 1411 (C.A.), at para. 60. [111] Cain v. Pfizer, 2018 ONSC 297 at para. 70, also applied this standard, citing Young, when considering the applicability of a forum selection clause to an employment dispute: "[M]y assessment on this [stay of proceedings] motion must be based on the Plaintiff's claim if it has a reasonable basis in the record." While Di Stefano was decided prior to Douez, Cain was decided after, and with consideration given, to Douez. [112] Based on the Ontario jurisprudence, if there is a reasonable basis in the record to show that a franchise relationship exists, I will accept those facts, but only for the purpose of this application. As this is a preliminary motion, this Court is not to make a final decision on whether the Franchises Act applies. [113] I do not agree with DKI that, contrary to Pompey, I will be treading on the merits of the dispute and providing a strategic advantage to Canstar if I determine on the record before me that the hallmarks of a franchise agreement are present. Determining whether there is a reasonable basis in the record to establish a franchise agreement is not determining the substantive legal issues underlying the dispute. Based on the principles articulated in Di Stefano, Young, and Cain, I am entitled to undertake a preliminary and tentative assessment of the record to determine if there is a reasonable basis that a franchisor/franchisee relationship exists. [114] Further, the "reasonable basis in the record" standard is similar to the "arguable case" standard applied in BC on preliminary motions: Purple Echo Productions, Inc. v. KCTS Television, 2008 BCCA 85 at paras. 34 and 41. The court does not make the final decision regarding whether the jurisdictional facts are true: The Original Cakerie Ltd. v. Renaud, 2013 BCSC 755 at paras. 23 and 55. The trial judge makes the ultimate determination based on the complete record before the court. [115] I will restrict my analysis to whether there is a reasonable basis in the record before me to establish that there is a franchisor/franchisee relationship between the parties. It will be up to the trial judge to ultimately determine the issues on their merits, including the applicability of the Franchises Act. I adopt the following from Cain at para. 5: I have purposely not made any findings of fact that will impede the adjudication of that issue at trial, on summary judgment, or in a motion for the determination of an issue of law. My findings and reasons, as detailed below, are solely for the purpose of concluding that this action may continue in [British Columbia] and should not be stayed in favour of [Ontario]. [116] I disagree with DKI that finding a reasonable basis in the record that a franchise relationship exists will give a juridical advantage to Canstar. As stated in Holt Cargo Systems Inc. v. ABC Containerline N.V. (Trustees of), 2001 SCC 90, cited with approval in Pompey at para. 39: [91] The "natural forum" is the one to which the action has the most real and substantial connection (Amchem, at pp. 916 and 935). Relevant circumstances include not only issues of public policy (as in this case) but also the potential loss to the plaintiff of a juridical advantage sufficient to work an injustice if the proceedings were stayed, the place or places where the parties carry on their business, the convenience and expense of litigating in one forum or the other, and the discouragement of forum shopping. In short, within the overall framework of public policy, any injustice to the plaintiff in having its action stayed must be weighed against any injustice to the defendant if the action is allowed to proceed. What is required is that these factors be carefully weighed in the balance. [117] Once the merits are being considered, the forum selection has already been made and Canstar would derive no benefit from s. 12 of the Franchises Act. By contrast, DKI can persuade the trial judge on a full evidentiary record that there is no franchise agreement between the parties. On balance, if there is any tactical advantage, it would attach to DKI. [118] I am lastly encouraged in my conclusion from discussion in Pompey around s. 46(1) of the Marine Liability Act. To determine the applicability of s. 46(1), a judge on a stay application would conceivably have to come to a conclusion on whether the Hamburg Rules applied and determine whether one of the criteria in subsections (a) through (c) was met. In Pompey, the Court was not concerned that such a legislative provision required an impermissible consideration of the merits: [38] Such a legislative development does not, however, provide support for the fundamental jurisprudential shift made by the Court of Appeal [the switch to the tripartite test] in the case at bar. To the contrary, s. 46(1) indicates Parliament's intent to broaden the jurisdiction of the Federal Court only in very particular instances that can easily be ascertained by a prothonotary called upon to grant a stay of proceedings pursuant to the forum selection clause of a bill of lading. Section 46(1) in no way mandates a prothonotary to consider the merits of the case, an approach in line with the general objectives of certainty and efficiency, which underlie this area of the law. [Emphasis added.] [119] I conclude I may examine the underlying jurisdictional facts to determine whether there is a reasonable basis in the record that the parties' relationship brings them within the Franchises Act. I therefore grant leave to the respondent to rely on its supplemental affidavit. VIII. Is there a Reasonable Basis in the Record to establish a Franchise Relationship between the Parties? Legal Principles [120] Section 12(1) only applies to void forum selection clauses in a "franchise agreement", which is defined in s. 1 as "any agreement that relates to a franchise and is entered into between (a) a franchisor or franchisor's associate, and (b) a franchisee". Because franchisee and franchisor are also defined as involving a franchise, the real question before me with respect to the applicability of s. 12(1) is whether a "franchise" exists. Examining the Franchises Act, s. 1 defines "franchise" by reference to three elements (there is also an alternative definition which the parties agree does not apply): "franchise" means a right to engage in a business in which a franchisee is required by contract or otherwise to make a payment or continuing payments, whether direct or indirect, or a commitment to make that payment or those payments, to a franchisor, or a franchisor's associate, in the course of operating the business or as a condition of acquiring the franchise or commencing operations, and (a) in which (i) the franchisor grants the franchisee the right to sell, offer for sale or distribute goods or services that are substantially associated with the franchisor's or the franchisor's associate's trademark, trade name, logo or advertising or other commercial symbol, and (ii) the franchisor or the franchisor's associate exercises significant control over, or offers significant assistance for, the franchisee's method of operation, including building design and furnishings, locations, business organization, marketing techniques or training . [Emphasis added.] [121] DKI concedes that the parties' relationship meets the first two elements of the definition of a "franchise" within the meaning of the Franchises Act: (i) Canstar was required to make payments to DKI to operate the DKI business in the Lower Mainland; and (ii) DKI granted Canstar the right to sell services substantially associated with its trademarks, tradename, logo, and other commercial symbols. Therefore, the only question is whether DKI exercises significant control over, or offers significant assistance for, Canstar's method of operation. [122] A number of cases assist in determining whether a business exercises significant control over or offers significant assistance for another business's method of operation such that a franchise agreement is established: Beer v. Personal Service Coffee Corp., 2005 CarswellOnt 3142 (S.C.J.), rev'd on other grounds (2005) 256 D.L.R. (4th) 466, 200 O.A.C. 282; Di Stefano; 1706228 Ontario Ltd. v. Grill It Up Holdings Inc., 2011 ONSC 2735 [Grill It Up]; MGDC Management Group v. Marilyn Monroe Estate, 2014 ONSC 4584 [Marilyn Monroe]; Chavdarova v. The Staffing Exchange, 2016 ONSC 1822, rev'd on other grounds 2016 ONCA 874; Fyfe v. Vardy (Dial A Bottle), 2018 ONSC 5066; Business Blossoms Inc. v. Blossoms Fresh Fruit Arrangements Ltd., 2016 ABQB 275. [123] I note that the definitions of franchise in the Wishart Act and the Franchises Act are identical, but the definition in the Franchises Act, R.S.A. 2000, c. F-23, differs significantly from that in BC. I have kept this difference in mind when considering Business Blossoms. [124] To determine whether a franchise exists, I must examine the substance of the parties' Agreements and relationship rather than the form or labels attached: Fyfe at para. 15; Chavdarova at paras. 7 and 33; Business Blossoms at para. 53. It is the substance of a relationship that determines whether there is a franchise, not the title given to it by the parties. This can be so even if one party refuses to sign a formal "franchise agreement": Grill It Up at paras. 29 and 31. [125] The statutory definition of a franchise does not require structural rigidity or direct operational control. As stated in Osler, Hoskin & Harcourt LLP, Canadian Franchise Guide, 2nd ed. (Toronto: Thomson Reuters, 2015) (looseleaf 2019 revision) at Ch. 2, s. 2B.6: Whether the acts apply to any particular commercial arrangement requires a contextual analysis of the arrangement. The comprehensive definition of a 'franchise' captures within its meaning a number of business relationships other than traditional business format franchises. [126] In Fyfe the court noted that the defendant did not have complete control, but did have significant control over important aspects of the plaintiff's business. For example, the defendant controlled taking orders and referring those orders to the plaintiffs. It controlled the logo, marketing materials, and web design. The defendant controlled billing for telephone lines, telemarketing, and telephone book advertising. It also charged a three dollar management fee for each delivered order. The court found that the "defendant exercised significant control over important aspects of the plaintiff's business": at para. 32. [127] In Marilyn Monroe, by contrast, the evidence established there was a simple trademark licensing agreement. The court noted the respondents' sole contribution was to license the Marilyn Monroe name; they did not have any rights or control over the running or development of the business, décor, quality, or uniformity of the products, advertising, training, or reviews of the business: at paras. 11 and 15. As a result, the Wishart Act did not apply and the forum selection clause was enforceable. Similarly, in Di Stefano the court found that the respondents' sole contribution was to provide a five day training program focused on the products to be sold. There was no ongoing exercise or offer of either control or assistance. [128] The trial level decision in Beer demonstrates that significant control can be exercised, or significant assistance offered, by varied means. This can include control over performance or quality standards, reporting or inspection obligations, insurance policies, requirements to attend training or other meetings, price controls, and marketing standards. In determining that the Wishart Act applied, the Ontario Superior Court endorsed the following factors as indicia of substantial control or assistance: · Control over how the franchisee represents itself and how it uses the trademark; · Control over standards for the identification of all users of the trademark; · Requirements to purchase or lease equipment through the franchisor or with the franchisor's consent; · Requirements to attend initial and ongoing training and meetings; · Ability to inspect samples of the uses of the trademark and the method of performance of the franchisee's services in order to control the character and quality of the goods/services offered; · Requirements to provide purchase and sale information upon request; · Control over promotional pricing; · Requirements to obtain insurance and name the franchisor as an additional insured; · The right for the franchisor to change or modify the system, products, or trademark without notice or consent; · The right to set quotas or minimum sale requirements; and · Significant assistance in training, sales presentations and demonstrations, non-financial advertising assistance, and provision of printed materials such as brochures and pamphlets. [129] The key issue here is whether DKI "exercise[d] significant control over, or offer[ed] significant assistance for" Canstar's "method of operation" as set out in s. 1(a)(ii) of the Franchises Act. This test is disjunctive: the plaintiff need only establish significant control or significant assistance for a franchisee's method of operation to apply. Parties' Arguments DKI [130] DKI argues that s. 1(a)(ii) of the Franchises Act only applies where DKI actually exercised significant control or actually provided significant assistance to Canstar: Business Blossoms. DKI argues that the court must look at the factual matrix in which the agreement was entered and how their agreements were applied. [131] DKI filed affidavit evidence which establishes it is an association of independent business owners. Its members decide the rules governing the DKI business. Changes to DKI's membership structure, for example bylaw updates, fee increases, and new proposals, are subject to a majority vote by its members. Branding standards and recommendations are put in place with the approval of DKI members. [132] DKI relied on the fact that local operators of DKI businesses were able to vote on certain DKI bylaws before they came into effect. DKI also relied on the fact that Mr. Dargatz, the President of Canstar, was until recently a member of DKI's board. [133] DKI points out that Canstar, while a member, was not compliant with DKI's national branding standards or its mandatory software requirements. Despite this, DKI did not penalize Canstar or take any steps to enforce these standards and requirements. DKI points out that this is atypical for a franchise operation and relies on its lack of enforcement actions against Canstar to show a lack of "significant control" existed. [134] DKI emphasizes that it did not have any oversight or knowledge of how Canstar operated, whom it hired, or the investment structure in the company. It did not have input into employee or management compensation, financial targets, budgets, performance strategic plans, or client growth objectives. DKI attempted to refute the record regarding the control it had over Canstar's methods of operating. [135] DKI further points out that Canstar had a change of ownership in 2016 but Canstar did not advise DKI of the terms, conditions, or purchase price of the transfer. DKI was not involved in the discussions or negotiations surrounding the transfer. [136] DKI admits it provides its members training. However, it encourages its members to grow their businesses and develop relationships with their own clients. DKI's members are free to accept or decline work from DKI insurance clients. Canstar exercised this option on a number of occasions. [137] DKI argues all of these factors demonstrate the lack of control DKI exercised over the business operations of Canstar. DKI did not interfere with Canstar's clientele or method of service. DKI admits it provides training to its members but insists that is not enough to constitute "significant assistance" in Canstar's operation. As a result, there is no "reasonable basis" on the record to conclude that DKI is a franchise or that the agreements between the parties were franchise agreements. Canstar [138] Canstar argues DKI provided significant assistance through enabling Canstar to access DKI's national client base of insurers. Canstar also points to the fact that DKI negotiated contracts with insurance clients on behalf of its members (including Canstar), collected funds for services provided by Canstar, provided accounts receivable billing services, rendered collection services if clients did not pay, and operated a central phone line to provide emergency service referrals. Lastly, Canstar argues DKI's branding provided assistance to Canstar in serving clients. [139] Canstar also argues DKI exercised significant control over Canstar's method of operation. Canstar submits that they were bound by the Agreements to adhere to all DKI policies and DKI bylaws. It argues this provided DKI with significant control over Canstar in a number of key areas: performance and quality standards; reporting and inspection requirements; insurance obligations; mandatory attendance at training or other meetings; control of pricing and the scope of services; marketing or branding standards and materials; and customer development and administration. Canstar argues these are the same factors set out in Beer, Grill It Up, Fyfe, and Chavdarova which go to establishing a franchise relationship. [140] Canstar concedes that DKI did not exercise significant control over store design because Canstar does not have a store. It submits such control is not necessary to establish a franchise relationship as there are other indicia of control present. Analysis [141] Based on the jurisprudence, control does not have to be total or all encompassing. It is not a bright line test. Control arises from a combination of factors determined by an inquiry into the facts and the evidence. It can be found on the basis of contractual rights and obligations: Beer at paras. 6 and 10-11; Grill It Up at paras. 23-31; Marilyn Monroe at paras. 9-16; and Fyfe at paras. 26-32. [142] I agree that the approach courts have taken to contractual interpretation is to have regard for the surrounding circumstances and the factual matrix. I must not examine the words alone; I need to determine the intent of the parties and the scope of their understanding. Reading the contract as a whole, I must take a common sense approach to the interpretation of the agreement between the parties. I must examine the circumstances at the time of the formation of the contract: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at paras. 46-48. [143] Based on my preliminary assessment, I agree with Canstar that the record discloses a reasonable basis for finding that the parties were in a franchise relationship. On the limited record before me, it appears that DKI exercised significant control over and provided significant assistance to Canstar. [144] The court in Beer explicitly examined the contract between the parties to see what rights it granted the franchisor and what requirements it imposed upon the franchisee. There was little discussion of whether or not the franchisor in that case had actually enforced any of the requirements or exercised the control granted under the contracts. A similar approach was taken in Chavdarova. Here, the Agreements set out the following: · The right for DKI to inspect Canstar's advertising material and performance of services to ensure compliance with the Agreements (clause 4(1)); · The right for DKI to terminate the Agreement immediately if Canstar "fails to maintain its membership in good standing in the Disaster Kleenup Canada Network" (clause 6(1)(d)); · The requirement for Canstar to obtain and maintain insurance coverage in accordance with DKI's requirements (clause 7(1)); and · The requirement for Canstar to obtain DKI's consent before selling, transferring, or assigning the Agreement (clause 8). [145] In particular, I note that clause 6(1)(d) provided DKI with the right to terminate the Agreement if Canstar failed to maintain its membership in the DKI Canada Network in good standing. This requirement directly engages the Network Bylaws. The first page reads, in part: The Policies sub-section outlines the current policies in place, which DKI Canada Ltd. Network members must adhere to in order that they maintain their membership in good standing. As a member of the DKI Canada Ltd. Network, you must agree to support the Mission and Goals of the Network and adhere to the DKI Canada Ltd. Code of Ethics, Standards of Performance and Membership Terms of Reference as documented below. [146] I do not accept DKI's interpretation that it had to exercise control or actually provide significant assistance to Canstar to fit within the definition of franchise in s.1 of the Franchises Act. Control is not simply based on exercising it. The threat of control, or the knowledge that the other party can exercise that control at any moment, is sufficient to establish the power between the parties. I do not accept that a lack of enforcement of the bylaws or policies translates into a conclusion that no significant control was exercised over Canstar. [147] I note that in Business Blossoms, the court expressly found "none of the Agreements, or any other materials that Fresh Fruit provided to Business, imposed any requirements on [the] Business in relation to the operation of its business other than to require the proper use of Fresh Fruit's [trademarks]." This conclusion was bolstered by evidence provided by the parties that the Business conducted itself "as it saw fit" during the relationship. Business Blossoms does not stand for the principle that it is the actual exercise of control which is determinative of the question. [148] I do not need to decide at this juncture, and I decline to do so, whether Canstar was contractually obligated to follow the bylaws. First, control was not limited to the bylaws as seen from the other rights and requirements listed above. Second, DKI's CEO, Mr. Schmidt, stated in his affidavit that the members of the Network agree to adhere to the bylaws and membership terms. Lastly, the reasonable basis standard does not require a definitive finding on this point. In my view, there is a reasonable basis on the record to show that DKI exercised significant control over Canstar's method of operations. [149] I am also satisfied there is a reasonable basis on the record that DKI provided significant assistance to Canstar. Mr. Dargatz states in his affidavit that "the whole purpose for Canstar joining DKI was to access a more national client base [such that] Canstar would be doing jobs that it would not otherwise have obtained." [150] Mr. Dargatz also stated that DKI provided assistance throughout the relationship with particular insurance company clients. This included negotiating contracts and pricing, receiving funds (taking a percentage and passing the remainder to Canstar), and managing collections if these clients did not pay. As mentioned above, insurance companies make up a large portion of Canstar's client base. Mr. Schmidt did not dispute this assistance was offered, but characterized much of it as "optional" such that members could choose to accept or decline DKI's assistance. In my view, this is not a reason to conclude the definition in the Franchises Act is not met. Indeed, the language of the Franchises Act only requires a franchisor to offer significant assistance. [151] There is a reasonable basis on the record to show that DKI offered significant assistance for Canstar's method of operation. [152] I am not certain that a franchise arrangement exists. My analysis is not a summary disposition of the issues. Whether a franchise relationship exists will be determined after a review of the complete evidentiary record before the trial judge. Nevertheless, I am persuaded that Canstar has established a reasonable basis on the record that a franchise relationship exists. Conclusion on First Stage of the Pompey Test [153] I agree equal parties should be permitted to determine their contractual obligations including selecting, in advance, the forum in which to adjudicate potential disputes. However, the principle that parties should be kept to their bargain is not absolute. There are legislative requirements that this Court must take into account. The authorities are clear that courts must respect legislative provisions that clearly intend to override forum selection clauses: Douez at paras. 41-44, 108-110, and 143-144; Pompey at paras. 38-39. [154] In the case before me, there is legislation to ensure access to BC courts where there is a franchise relationship. In the words of the dissent in Douez, the legislature has adopted a "protective model" by legislating "an absolute or limited right to bring an action in British Columbia, in the face of a forum selection clause stipulating a different jurisdiction": at para. 144. I have found there is sufficient evidence, at this juncture, to establish a franchise relationship. For the purposes of this application, the Franchises Act applies to the parties' disputes. [155] For the above reasons, I cannot give effect to the Forum Selection Clause. I find that the Forum Selection Clause is unenforceable and void due to the operation of s. 12(1) of the Franchises Act. IX. Second Stage of the Pompey Test [156] Forum selection clauses are private agreements to oust the jurisdiction of otherwise competent courts in favour of another jurisdiction. They are common in commercial contracts and it is generally in the public interest to enforce such clauses. Consequently, once it is established that a forum selection clause is valid, clear, and enforceable, the burden shifts to the party opposing the clause to show strong cause why the court should not give effect to it. [157] If I had found for DKI at the first stage of the Pompey test, Canstar would have the burden at the second stage to demonstrate that there is strong cause why the Forum Selection Clause should not be enforced. Canstar conceded that if the Forum Selection Clause is valid and enforceable, there would be no strong reason why it should not be enforced under the second stage of the Pompey test. [158] I assume Canstar is not conceding this point if the statutory grant of jurisdiction found in the Franchises Act is not considered until the second stage of the analysis. However, it is not necessary for me to answer that question given my decision. DKI has not established that the Forum Selection Clause is enforceable. Once the forum selection clause is void, there is no need not address the second stage of the Pompey test. X. Should I decline jurisdiction on the basis of forum non conveniens? [159] Now that I have found the Forum Selection Clause to be unenforceable under the Pompey test, there are two competing possibilities for forum: British Columbia and Ontario. I must consider the principles of forum non conveniens, as codified in s. 11 of the CJPTA, in considering whether I should nonetheless decline jurisdiction and grant the stay: Douez at para. 131. Parties' Positions [160] DKI does not dispute that this Court has territorial competence or jurisdiction simpliciter over the parties. DKI submits I should decline jurisdiction on the basis of forum non conveniens because there is a forum selection clause between the parties that should govern the dispute. [161] DKI emphasizes that the Ontario Superior Court of Justice has subject matter competence in the matter before me. DKI argues that even if the Forum Selection Clause is not enforceable, it should be taken into account as one consideration under forum non conveniens. DKI argues the parties freely entered into the Forum Selection Clause and it ought to be considered at this stage of the analysis. Based on the contractual agreement and the sophistication of the parties, the claim should be stayed and transferred to Ontario. It is the more appropriate forum for the proceeding. [162] DKI argues the causes of action that form the basis of these proceedings arose in Ontario. DKI accepted Canstar's termination of the agreements in Ontario. In addition, the alleged breach of confidence (by email) originated in Ontario. Relying on The Original Cakerie and s. 11 of the CJPTA, DKI argues Ontario is the more appropriate forum for determination of the issues based on the following factors: a. DKI is domiciled in Ontario and is not extra-provincially registered in BC; b. there is no juridical advantage to Canstar in having its claim adjudicated in BC as compared to Ontario; c. the continuation of the within proceeding in BC would result in significant expense and inconvenience to DKI Canada and its witnesses as all of them are domiciled in Ontario; and d. even if Canstar succeeds in obtaining a judgment against DKI in BC, it could only be enforced in Ontario as DKI has no assets in BC. [163] Canstar disagrees. It contends that DKI cannot refer to the Forum Selection Clause when considering forum non conveniens because, if we are at this stage of the proceedings, the Forum Selection Clause is void. [164] Except for sporadic disaster relief in Alberta, Canstar has operated exclusively in BC. Canstar argues all its witnesses related to this proceeding are located in BC, all of Canstar's documentary evidence is located in BC, all of Canstar's obligations to DKI were performed in BC, and the damage Canstar suffered occurred in BC. [165] Canstar argues DKI cannot establish that Ontario is a "clearly more appropriate" jurisdiction, and has failed to meet the test to have the proceedings transferred to Ontario. Legal Principles [166] Forum non conveniens is a discretionary power that permits courts to stay a case where another court or forum is better suited to hear it. The party seeking a stay of proceedings bears the burden of proving that the court of another jurisdiction is "clearly more appropriate": Club Resorts Ltd. v. Van Breda, 2012 SCC 17 at para. 109 [Van Breda]; JTG Management Services Ltd. v. Bank of Nanjing Co. Ltd., 2015 BCCA 200 at paras. 45-46; Breeden v. Black, 2012 SCC 19 at paras. 23, 29, and 37; Douez at paras. 17-22, 28-29, 126, and 133-144; Pompey at paras. 39-40. [167] Due to my conclusions above that the Forum Selection Clause is void, DKI has the burden to show that Ontario is the "clearly more appropriate" jurisdiction for this dispute. The burden is thus significantly different than under the second stage of the Pompey test, though similar factors are considered under both analyses. [168] Justice Le Bel, writing for the Supreme Court of Canada in Van Breda, described the burden as follows: [109] The use of the words "clearly" and "exceptionally" should be interpreted as an acknowledgment that the normal state of affairs is that jurisdiction should be exercised once it is properly assumed. The burden is on a party who seeks to depart from this normal state of affairs to show that, in light of the characteristics of the alternative forum, it would be fairer and more efficient to do so and that the plaintiff should be denied the benefits of his or her decision to select a forum that is appropriate under the conflicts rules. The court should not exercise its discretion in favour of a stay solely because it finds, once all relevant concerns and factors are weighed, that comparable forums exist in other provinces or states. It is not a matter of flipping a coin. A court hearing an application for a stay of proceedings must find that a forum exists that is in a better position to dispose fairly and efficiently of the litigation. But the court must be mindful that jurisdiction may sometimes be established on a rather low threshold under the conflicts rules. Forum non conveniens may play an important role in identifying a forum that is clearly more appropriate for disposing of the litigation and thus ensuring fairness to the parties and a more efficient process for resolving their dispute. [Emphasis added] [169] The forum non conveniens analysis has been codified in s. 11(2) of the CJPTA. It sets out a non-exhaustive list of factors to consider: Discretion as to the exercise of territorial competence 11 (1) After considering the interests of the parties to a proceeding and the ends of justice, a court may decline to exercise its territorial competence in the proceeding on the ground that a court of another state is a more appropriate forum in which to hear the proceeding. (2) A court, in deciding the question of whether it or a court outside British Columbia is the more appropriate forum in which to hear a proceeding, must consider the circumstances relevant to the proceeding, including (a) the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum, (b) the law to be applied to issues in the proceeding, (c) the desirability of avoiding multiplicity of legal proceedings, (d) the desirability of avoiding conflicting decisions in different courts, (e) the enforcement of an eventual judgment, and (f) the fair and efficient working of the Canadian legal system as a whole. [170] The BC Court of Appeal in JTG Management Services at para. 22 endorsed the following factors considered by the motion judge in The Original Cakerie: (1) where each party resides; (2) where each party carries on business; (3) where the cause of action arose; (4) where the loss or damage occurred; (5) any juridical advantage to the plaintiff in this jurisdiction; (6) any juridical disadvantage to the defendant in this jurisdiction; (7) the convenience or inconvenience to potential witness; (8) the cost of conducting the proceeding in this jurisdiction; (9) the applicable substantive law; (10) the difficulty and cost of providing foreign law, if necessary; [and] (11) where there are parallel proceedings in any other jurisdiction. [171] A forum selection clause constitutes only one factor to be considered under the test for forum non conveniens: Pompey at para. 21. Analysis [172] DKI bears the burden of establishing that its preferred forum is the clearly more appropriate forum: Van Breda at para. 109; Breeden at paras. 23 and 37. The existence of a more appropriate forum must be clearly established in order to displace the plaintiff's choice of forum: Purple Echo at para. 59. [173] I agree with DKI that the existence of the Forum Selection Clause in the Agreements informs the test under the CJPTA. However, because I have found the Forum Selection Clause is void, it is given little weight. [174] Applying the CJPTA factors listed above, I find DKI has not shown Ontario is the more appropriate forum for this action. (a) Convenience, Expense, and Location of Cause of Action [175] DKI argues that it accepted Canstar's termination of the Agreements in Ontario and therefore the cause of action occurred there. DKI also says all of its witnesses are domiciled in Ontario. [176] I note that the Hansard debates indicate a concern on behalf of the legislature that franchisees will have increased expense from being forced to litigate outside BC. This was part of the intention behind including s. 12(1) in the Franchises Act: [Franchisors] have entire legal departments to provide that kind of support, whereas a franchisee, as an individual business owner, is having to find money for legal costs, is having to find a lawyer, is having to try and navigate a system that is far away, that isn't even here. I think that probably, for me, was one of the clearest areas that pointed out the need for this kind of legislation.[10] I met with a franchisee in dispute with a franchisor -- and usually these disputes arise at a time of difficulty in the business -- who had to pursue his case in Ontario, even though everybody involved lived in British Columbia. The cost and consequence of that means that to seek legal remedy under those circumstances is very difficult.[11] [177] This, in my view, weighs towards the proceeding continuing in BC. [178] Except for sporadic disaster relief in Alberta, Canstar has operated exclusively in BC and all of Canstar's obligations to DKI were performed in BC. Canstar's witnesses are in BC, it received the communications giving rise to the cause of action in BC, and it suffered its damages in BC. Canstar is the plaintiff in this action and will have the burden of proving the cause of action, for which it will require witnesses and records that are located in BC. [179] Both parties will be inconvenienced by having to litigate in their less preferred forum. However, this factor slightly favours BC as the more appropriate forum. (b) Law to be Applied [180] There is significant dispute between the parties on this point. DKI argues that if the proceeding is allowed to continue in BC, the proper law to apply pursuant to the Forum Selection Clause would be Ontario law and therefore DKI "would bear the inconvenient burden of proving Ontario franchise law in this Court." [181] I do not see how this would be the case. As I read it, the Wishart Act would only apply if a potential franchise operated in Ontario. Both parties agree Canstar has never operated in Ontario. If any franchise legislation is to be applied to the proceedings, it would be the Franchises Act, a factor which weighs towards BC being the more appropriate forum. In Douez, the Court noted that even if a California court could or would apply the Privacy Act, BC courts were better placed to assess the purpose and intent of the legislation. That same analysis applies here. [182] If no franchise legislation is ultimately applicable, this is a contract dispute between Canstar and DKI. DKI has not provided any argument that a BC court would have difficulty with the law to be applied to a contractual dispute between two commercial entities not subject to franchise legislation. [183] This factor weighs towards BC as the more appropriate forum. (c) Avoiding Multiplicity of Proceedings [184] As far as I am aware DKI has not started a proceeding in Ontario. Instead, it has started a counterclaim in BC. There is no concern of multiplicity of proceedings or conflicting decisions if the action continues in BC. This factor is neutral. (d) Avoiding Conflicting Decision in Different Courts [185] Since the case at bar will be decided in either Ontario or BC, this issue is not relevant here. (e) Enforcement of Eventual Judgment [186] DKI argues it has no assets in BC and therefore it would be easier to enforce a judgment in Ontario. Canstar argues it has accepted this risk by beginning the action in BC. I also note that it is a fairly simple matter to enforce BC judgments in Ontario pursuant to the Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R.5. I agree this factor weighs towards Ontario as the more appropriate forum, but for these reasons I give it limited weight. (f) Fair and Efficient Working of the Canadian Legal System [187] DKI states there is "no juridical advantage to Canstar having its claim adjudicated in BC"; DKI does not argue there is a juridical disadvantage to having the claim adjudicated in Ontario. As noted before, the Wishart Act and the Franchises Act are quite similar, and neither party has pointed to a juridical advantage or disadvantage in either forum. [188] I find the fair and efficient working of the legal system as a whole is served best by upholding Canstar's choice of forum, that being BC. If there is a franchise relationship, there is a clear intention on the part of the BC and Ontario legislatures to have disputes involving franchisees who operate in their respective provinces decided in those respective provinces. If there is not a franchise relationship, either court could adjudicate the action and the efficient working of the legal system supports the action continuing in the preferred forum the plaintiff has chosen. Conclusion on Forum Non Conveniens [189] The test under the forum non conveniens analysis is whether Ontario is the "clearly more appropriate" jurisdiction. DKI has not met that burden. Considering all the factors in the CJPTA, as well as JTG Management, I am persuaded BC is the more appropriate forum or both forums are equally appropriate. In such a situation, particularly where there are no proceedings extant in the Ontario courts, BC is the appropriate court to hear this action. [190] For the above reasons, I find that the BC courts have jurisdiction over this action. I dismiss the application to have the action stayed in BC and transferred to Ontario. XI. Conclusion [191] I have declined the stay based on the statutory conferral of jurisdiction to the BC Supreme Court pursuant to s. 12(1) of the Franchises Act. The jurisprudence indicates consideration of the applicability of the Franchises Act is a necessary component of the first stage of the Pompey test when determining whether the Forum Selection Clause is enforceable. To do so, I must undertake a preliminary assessment of the facts to determine if the relationship between the parties is that of franchisor/franchisee. There would be a juridical disadvantage to Canstar to wait for this determination when the merits are heard as the dispute would already be before the Ontario courts. This would be contrary to public policy because it would deny to Canstar the protective role of the legislation. [192] The applicability of s. 12(1) of the Franchises Act and the enforceability of the Forum Selection Clause turn on whether there is a reasonable basis in the record to show the Agreements between the parties are franchise agreements. This standard does not require impermissible delving into the merits of the underlying action. I allowed Canstar to rely on the supplemental affidavit to demonstrate there is a reasonable basis in the record to establish the existence of a franchise relationship between the parties. I have found that Canstar has established a reasonable basis on the record to establish a franchise relationship at this stage in the proceedings. Therefore, s. 12(1) of the Franchises Act operates to render the Forum Selection Clause void at the first stage of the Pompey test. [193] With the Forum Selection Clause voided, DKI has not met its burden to show, under the forum non conveniens analysis in the CJPTA, that Ontario is clearly the more appropriate forum for the action. XII. Disposition [194] I decline to stay the within proceedings pursuant to Rule 21-8 of the Rules. I further decline to stay the proceedings on the basis of forum non conveniens and s. 11 of the CJPTA. [195] I dismiss the application. "D. MacDonald J." [1] "Bill 38, Franchises Act", 2nd Reading, British Columbia, Report of Debates of the Legislative Assembly (Hansard), 40th Parl., 4th Sess., Vol. 29, No. 5 (7 October 2015) [2nd Reading] at 9509 (Carole James). [2] 2nd Reading at 9514 (Adrian Dix). [3] 2nd Reading at 9499 (Jane Shin). [4] 2nd Reading at 9508 (Carole James). [5] "Bill 38, Franchises Act", Committee of the Whole House, British Columbia, Report of Debates of the Legislative Assembly (Hansard), 40th Parl., 4th Sess., Vol. 29, No. 7 (8 October 2015) at 9563 (Hon. Coralee Oakes). [6] 2nd Reading at 9514 (Adrian Dix). [7] Justice Abella recognized the importance of facilitating international commercial transactions and accepted that "certainty and predictability generally favour the enforcement at common law of contractual terms". However, Abella J. found the case before her concerned a contract of adhesion where there was virtually no opportunity for the consumer to negotiate the terms of the clause. [8] Uniform Franchises Act and Regulations, published by the Uniform Law Conference of Canada. The Ontario legislation was the basis for the Uniform Act and the BC legislation is modelled on the Uniform Act. [9] The doctrine of fundamental breach was struck down in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4. I need not say more about this as I do not see this as an issue before me. [10] 2nd Reading at 9511 (Carole James). [11] 2nd Reading at 9514 (Adrian Dix).