Executive Summary: Key Legal and Evidentiary Issues

• Ontario’s jurisdiction over Alberta defendants hinged on whether there was a real and substantial connection to the dispute.

• The court examined where the guarantees were formed and whether they were sufficiently connected to Ontario.

• The leases referenced Ontario law, but the guarantees did not, creating uncertainty around applicable law.

• The defendants argued that the guarantees were accepted in Alberta or British Columbia, not Ontario.

• The court concluded that Ontario lacked jurisdiction simpliciter and that Alberta was a more appropriate forum.

• The action was stayed, and the plaintiff was ordered to pay substantial costs to the defendants.

Background and parties involved

Grand HVAC Leasing Ltd., an Ontario-based company, provided leased HVAC equipment to Boaz Pharmaceuticals Inc., a cannabis company based in Alberta. Four individuals—David Dupuis, Brent Goerz, David Isaak, and Lyle Wood—acted as personal guarantors of Boaz’s lease obligations. After Boaz became insolvent in 2023, Grand HVAC demanded payment under the personal guarantees. When the demands went unanswered, Grand HVAC commenced legal proceedings in Ontario against the guarantors, who all reside in Alberta.

Jurisdiction challenge by the defendants

The defendants brought a motion to dismiss or stay the Ontario action. They argued that the Ontario court lacked jurisdiction simpliciter and, even if it had jurisdiction, it should decline to hear the matter based on the doctrine of forum non conveniens. The defendants pointed out that they had no presence in Ontario and had not attorned to its jurisdiction. They maintained that the guarantees were formed outside Ontario—either in Alberta or British Columbia—and had no real connection to Ontario.

Ontario’s lack of jurisdiction simpliciter

The court analyzed whether any presumptive connecting factors to Ontario existed. While the leases between Grand HVAC and Boaz contained an Ontario choice of law clause, the guarantees did not. The court found that the guarantees were created and returned via email in British Columbia, and that Grand HVAC’s employee who facilitated the transactions worked from that province. There was no evidence the contracts were formed in Ontario. The court emphasized that presence of the plaintiff in Ontario and a choice of law clause were not enough to ground jurisdiction without more substantive connections.

Forum non conveniens analysis

Although the court’s conclusion on jurisdiction simpliciter was sufficient to resolve the case, it also considered whether Alberta was a more appropriate forum. The court found that all witnesses and parties were based in Alberta or Western Canada. The equipment in dispute was located in Alberta, and any future enforcement would also take place there. There was a risk that Grand HVAC would have to duplicate proceedings across provinces. The court concluded that Alberta was clearly the more appropriate forum to hear the dispute.

Outcome and implications

The action was stayed. The court ruled that Ontario lacked jurisdiction simpliciter, and even if it had jurisdiction, the case should proceed in Alberta under the forum non conveniens doctrine. Grand HVAC was ordered to pay costs of $18,000 to Mr. Dupuis and $50,000 to the other three defendants. This decision reinforces the need for a meaningful connection to Ontario when seeking to litigate cross-border commercial disputes and highlights the importance of drafting clear forum selection and governing law clauses in guarantee agreements.