Canada: The Long Arm Of The Law Is Not That Long: Court Declines Jurisdiction Over Document Production By Foreign Non-Party

In Lockwood Financial Ltd. v. China Blue Chemical Ltd., the British Columbia Supreme Court (BCSC) ruled that it does not have the territorial jurisdiction to order a foreign company to give documentary evidence in a proceeding in B.C. to which it is not a party. The decision provides reassuring guidance on the basis of jurisdiction relating to contractual obligations to be carried out in B.C. and the nature of carrying on business in B.C. In general, the BCSC's decision indicates a serious reservation to compel a non-resident who does not carry on business in B.C. to do something outside the province.


The decision's background relates to a proceeding brought by Lockwood Financial Ltd. (Lockwood), a Quebec company in the business of finding investors for natural resource companies.

On September 1, 2010, Lockwood entered into a contract with a Vancouver-based company (B.C. Company) whereby Lockwood agreed to seek third-party investors for the B.C. Company in exchange for certain fees (Finder Agreement).

Lockwood alleged that in January 2011 it introduced the B.C. Company to certain investors, including a Chinese company headquartered in Beijing that maintains a principal place of business in Hong Kong (Applicant).

Lockwood alleged that the B.C. Company breached the Finder Agreement by restructuring and delaying an investment opportunity with the Applicant in order to deprive Lockwood of its fees under the Finder Agreement. However, Lockwood did not bring an action against the B.C. Company, it said, because it did not know if there was any basis to the claim. Lockwood believes that certain documents in the Applicant's possession would enable it to determine whether it has an action against the B.C. Company. As such, Lockwood brought a petition in the BCSC for an order that the Applicant produce any and all documents exchanged with the B.C. Company over a period of four years concerning or relating to the financing of the B.C. Company. This type of order is commonly referred to as a Norwich Pharmacal order, after the British House of Lords' decision that recognized the remedy. A Norwich Pharmacal order or "equitable bill of discovery" allows a court to order a non-party to a proceeding to provide information where the information sought is necessary to identify wrongdoers, find and preserve evidence that may substantiate an action or determine whether an action exists, and trace and preserve assets.

The Applicant sought an order staying or dismissing Lockwood's petition on the basis that the BCSC did not have jurisdiction and, even if it did, the BCSC's jurisdiction should be declined as Hong Kong was clearly the more appropriate forum.


Before the BCSC, Lockwood argued that the BCSC could assert territorial jurisdiction under the Court Jurisdiction and Proceedings Transfer Act on the basis of a real and substantial connection between B.C. and the dispute. Lockwood asserted that there were two grounds for such a connection. First, that the dispute "concerned" the Finder Agreement which, by its express terms, was governed by the law of B.C. Second, that the Applicant carried on business in the province based on the fact that: (a) it owned shares in a B.C. company, (b) its employees and directors held positions in a B.C. Company, (c) it retained lawyers in B.C., and (d) its representatives attended meetings in B.C.

The BCSC rejected both of Lockwood's arguments. The BCSC characterized the dispute as concerning the production of documents, not as concerning the Finder Agreement to which the Applicant was not a party. Only Lockwood's claims for document production mattered for the purposes of determining whether the BCSC had jurisdiction. 

The BCSC also rejected the idea that the Applicant could be said to have been carrying on business in B.C. based merely on the fact that it owned shares in a B.C. company, its employees and directors held positions in a B.C. company, and it had retained counsel in the province. Further, and importantly, the BCSC held that physically travelling to, conducting negotiations in and buying an asset in a foreign jurisdiction does not amount to carrying on a business in that jurisdiction. More is required. The BCSC characterized the Applicant as having a "passing presence" in the province, which was not enough for the B.C. courts to assert jurisdiction.

Although the BCSC concluded that it did not have jurisdiction over the matter, it went on to consider whether to exercise its discretion to hear Lockwood's petition if it did have jurisdiction. The BCSC would have declined to do so. The nature of the order sought was the most important factor here: Lockwood was seeking an order compelling an innocent, non-resident who does not carry on business in B.C., to assemble and provide documents to it. The Applicant was "innocent" in the sense that Lockwood did not accuse it of wrongdoing. In the BCSC's view, this was a serious and impermissible extension of the territorial jurisdiction of the B.C. courts, which would offend "fundamental notions of international comity" and exceed B.C. courts' constitutional limits. The BCSC concluded that Hong Kong was clearly the more appropriate forum for Lockwood to seek a Norwich Pharmacal order in these circumstances.   


The decision of the BCSC in Lockwood Financial Ltd. v. China Blue Chemical Ltd., provides international litigants with some assurance that B.C. courts will take a restrained approach to asserting jurisdiction where the connections between an innocent, non-resident party and B.C., or the dispute itself and B.C., are tenuous.

The most significant aspect of this decision is the BCSC's commentary on whether it ought to be the court to grant a Norwich Pharmacal order against an innocent, non-resident, non-party. As the BCSC noted, such a question had not previously been answered by a B.C. court. Thus, the decision of the BCSC will have significant persuasive impact on a party's ability to resort to extra-territorial discovery processes. The BCSC, in deciding this question for the first time, was quite forceful in declaring that the order sought by Lockwood was a significant expansion of the courts' power. Significantly, the BCSC rested its decision in part on the constitutional limitations on the BCSC's territorial jurisdiction. The BCSC stated in near categorical terms that it would not, even if given the discretion to do so, make a Norwich Pharmacal order against an innocent, non-resident without some connection to B.C.  

Another significant feature of this decision is the BCSC's interpretation of "carrying on business" in B.C. The BCSC had little time for the idea that merely having discussions and making an asset purchase in B.C. amounted to doing business in the province. However, international litigants should be mindful that consistent and repeated transactions within B.C. could culminate in a finding that they have carried on business in the province.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
27 Oct 2016, Seminar, Toronto, Canada

Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.

1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.