In Stuart Budd, the underlying action was brought by
eight new and used car dealers (the "Dealers") against
defendants from Ontario and the United States. Three of the Dealers
are based in Ontario (the "Ontario Dealers"), and the
other five have their businesses in Alberta, Quebec, Nova Scotia
and British Columbia (the "Non-Ontario Dealers"). Each of
the Dealers entered into a dealership agreement (collectively, the
"Dealership Agreements") with the defendant IFS Vehicle
Distributors ULC ("IFS"), a Canadian company responsible
for importing and distributing Saab motor vehicles and parts into
Canada. The Dealers allege that IFS failed to perform its
obligations under the Dealership Agreements, and seek various forms
of relief under the Arthur Wishart Act (Franchise Disclosure),
2000 (the "Act"). The Dealership Agreements contain
a clear "choice of law" clause, which provides that the
Dealership Agreements are to be governed by the laws of the
province of Ontario, but notably do not include a
"choice of forum" clause. While section 10 of the Act
prohibits the Dealership Agreements between IFS and the Ontario
Dealers from selecting a forum outside of Ontario, 1 the
Defendants took the position that this obligation did not extend to
the Dealership Agreements between IFS and the Non-Ontario
The defendants brought a motion to dismiss this action in its
entirety, arguing that Ontario was without jurisdiction to hear
this dispute or, alternatively, that Ontario was not the convenient
forum. The Ontario Superior Court of Justice rejected these
arguments and dismissed the motion. It held that there was
jurisdiction simpliciter in Ontario for all claims of the
Dealers against all defendants; a single proceeding was the
suitable and efficient way to advance these claims; and Ontario was
the convenient forum for this single proceeding. The defendants
have since appealed this decision. It has been over two years since
the underlying action was started, and nearly a year since this
motion was dismissed; however, the defendants have not yet filed a
Statement of Defence.
This complicated and lengthy dispute over jurisdiction and forum
demonstrates a problem that may arise if a franchise agreement does
not adequately address the question of forum. The decision did not
consider related issues, such as the right of franchisees to
associate with one another found in s. 4 of the Act.
1. Section 10 of the Act provides as follows: "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."
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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