Ontario Court Identifies New Presumptive Connecting Factor in Establishing Jurisdiction

Andrew Ottaway, B.A. (Hons.), LL.B.Business Litigation, Civil Litigation, Commercial and Contract Litigation, Commercial Litigation, Of Interest to US Counsel0 Comments

In Arend v Boehm, 2017 ONSC 3424, the three Applicants in a corporate dispute applied for orders pursuant to the oppression remedy (section 248) of the Ontario Business Corporations Act in respect of BitRush, an Ontario company.

The Judge noted that BitRush’s business was “reflective of the worldwide impact of business connected with the internet.”  The international character of BitRush’s business was reflected in the identity of the Respondents, who were: 1) BitRush’s CEO, an Austrian resident; 2) a former BitRush board member, also an Austrian resident; 3) BitRush’s majority shareholder, a UK company; and 4) another Austrian resident.

The Applicants sought: 1) a declaration that the Respondent CEO has acted oppressively, in breach of his fiduciary duty to BitRush; 2) an order transferring shares of BitRush from the Respondent UK company to certain other stakeholders; and 3) an order that the Respondent UK company’s remaining shares in BitRush be cancelled.

The Respondents brought a motion to stay the Application for lack of jurisdiction.  The Judge considered the test for determining jurisdiction, as set out by the Supreme Court in Van Breda v. Village Resorts Ltd., [2012] S.C.R. 572.  The Judge considered the four presumptive factors for establishing jurisdiction set out by the Supreme Court, as well as the Supreme Court’s statement that the list of presumptive factors was not closed.   

Notably, as part of his analysis, the Judge identified a new presumptive connecting factor to establish jurisdiction: the jurisdiction of the corporation’s domicile will be a presumptive connecting factor where the heart of the proceeding involves issues which go to the heart of the corporation’s business and affairs.

The Judge found that the Ontario Court had jurisdiction over the dispute, and dismissed the Respondents’ motion.  The full reasons for decision are available here.

This case provides an interesting insight into how the Courts may address jurisdictional issues for internet businesses with a “worldwide impact”.  

The lawyers at Gilbertson Davis LLP have experience with international litigation, including jurisdiction challenges.  Please contact us for an initial consultation.


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About the Author
Andrew Ottaway, B.A. (Hons.), LL.B.

Andrew Ottaway, B.A. (Hons.), LL.B.

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