Canstar Restorations Limited Partnership v. DKI Canada Ltd.

Parties

Procedural Posture

Application for Stay of Proceedings Under Rule 21 8 and S.11 CJPTA / Application Hearing and Interlocutory Jurisdictional Determination (stay Motion)

Legal Issues

1. 1 Whether the Franchises Act s.12(1) should be considered at the first or second stage of the Pompey test
2. 2 Whether courts may consider underlying facts at the jurisdictional stage to determine applicability of legislation
3. 3 What standard of proof applies on a stay motion to establish the Franchises Act applies

Ratio Decidendi

Court held that a statutory conferral of jurisdiction (Franchises Act s.12(1)) must be considered at the first stage of the Pompey test; the appropriate preliminary standard is whether there is a reasonable basis in the record that the agreements are franchise agreements; applying that standard the record disclosed a reasonable basis that DKI exercised significant control or offered significant assistance such that s.12(1) voided the forum selection clause; accordingly the stay was denied and BC retained jurisdiction because DKI did not show Ontario was clearly more appropriate.

Court Disposition

Application dismissed; stay of proceedings denied; forum selection clause found void under Franchises Act s.12(1); proceedings to continue in British Columbia

Orders

• Dismissal of defendant's application to stay proceedings under Rule 21-8
• Decline to stay proceedings on basis of forum non conveniens under s.11 CJPTA