Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether Manitoba courts had jurisdiction over a contract dispute with Ontario-based defendants.

• Plaintiff argued the contract was formed in Manitoba, triggering jurisdiction and proper service without leave.

• Defendants asserted Ontario was the more appropriate forum due to location of witnesses, evidence, and anticipated third-party claims.

• Manitoba Court considered both jurisdiction simpliciter and forum non conveniens under Rule 17.06.

• The Associate Judge confirmed service was properly authorized under Manitoba rules based on contract formation and damages sustained in Manitoba.

• Defendants failed to meet the high threshold to prove that Ontario was clearly the more appropriate forum.

Factual background and procedural posture

SPG Construction Ltd., a Manitoba corporation, entered into a contract in early 2024 with 15472296 CANADA INC., operating as Discount Kitchens, a federally incorporated Ontario-based company. The agreement involved the supply of 70 kitchen cabinets for a total cost of $157,224. SPG Construction paid $117,224 in advance. The delivery was scheduled in two shipments.

The first shipment, containing 35 cabinets, arrived missing doors and other components. The second shipment, which included the remaining cabinets, was damaged during transportation in Brampton, Ontario, in an incident involving Canadian National Railway (CNR) and shipping company TransX. SPG Construction commenced legal action in Manitoba, seeking repayment of the $117,224, $140,000 in lost income, plus interest and costs.

Motion to stay or dismiss based on jurisdiction

The defendants brought a motion to permanently stay or dismiss the action, arguing the Manitoba Court of King’s Bench had no jurisdiction over the dispute. They requested a declaration that Ontario's Superior Court of Justice had jurisdiction simpliciter or, alternatively, that it was the more appropriate forum under the doctrine of forum non conveniens.

They claimed the agreement was entered into in Ontario, that all relevant witnesses and evidence were in Ontario, and that any counterclaims or third-party claims—particularly against CNR and TransX—would need to be filed in Ontario. They argued separate proceedings in different provinces would be inefficient and risk inconsistent outcomes.

Plaintiff’s response and jurisdictional argument

SPG Construction opposed the motion, asserting that it accepted the quote in Winnipeg, thereby forming the contract in Manitoba. They argued that the location of contract formation and the fact that damages were sustained in Manitoba gave the province jurisdiction. The plaintiff relied on Rule 17.02(f) and 17.02(h), which authorize service outside Manitoba in cases involving contracts formed in Manitoba or losses sustained in Manitoba.

They further argued that modern litigation practices, including virtual examinations and testimony, minimized any inconvenience to Ontario-based parties. The plaintiff emphasized Manitoba’s more efficient trial scheduling process compared to Ontario.

Findings of the court

Associate Judge Goldenberg first held that he had no jurisdiction under s.38 of The Court of King’s Bench Act or Rule 21.01(3) to dismiss the action on jurisdictional grounds, as those powers are expressly reserved for a judge. However, under Rule 17.06(2), he had the authority to determine whether service outside Manitoba was properly authorized and whether Manitoba was a convenient forum.

He accepted the plaintiff’s evidence that the contract was formed in Manitoba when the plaintiff signed the quote in Winnipeg. He further found that losses were suffered in Manitoba, satisfying the conditions under Rule 17.02. As a result, he held that service in Ontario without leave was properly authorized.

On the issue of forum non conveniens, the court found that while Ontario may be more convenient for the defendants and third-party witnesses, the defendants had not established that it was clearly the more appropriate forum. The court emphasized that the threshold to displace the plaintiff’s chosen forum is high and was not met here. Potential counterclaims against the plaintiff and third-party claims against CNR and TransX could still proceed in Manitoba under Rule 17.02(m) and (n).

Outcome

The motion to stay or dismiss the action was dismissed. The court ruled that Manitoba had jurisdiction to hear the case, service was properly effected, and Manitoba was a convenient forum for the proceeding. The matter will proceed in Manitoba. The issue of costs was left open for the parties to address separately if necessary.