Executive Summary: Key Legal and Evidentiary Issues

• The central issue was whether the BC Supreme Court had territorial competence to hear a wrongful dismissal claim brought by a BC-based plaintiff against a US-based defendant company incorporated in Ohio.
   
• A choice of law clause in the consulting agreement designated Ohio law as the governing law for all disputes, though the parties agreed it was not a forum selection clause.
   
• Territorial competence under the Court Jurisdiction and Proceedings Transfer Act (CJPTA) required the plaintiff to establish a real and substantial connection between British Columbia and the facts on which the proceeding was based.
   
• Despite the plaintiff performing his work remotely from British Columbia, the court found that connection was incidental to the substance of the contractual obligations, which were to provide financial and tax services to US-based clients.
   
• Forum non conveniens analysis under s. 11(2) of the CJPTA further supported Ohio as the more appropriate forum, given that the majority of witnesses and the defendant's operations are based in the United States.
   
• The court also found that the plaintiff's preference to litigate in BC — where the Employment Standards Act may offer greater remedies — constituted forum shopping contrary to public policy.

Facts of the case

In a notice of civil claim filed April 3, 2025, Matthew Armstrong, a certified professional accountant residing and licensed to practice in British Columbia, alleged that he was an employee of AirCFO, LLC — a United States-based company incorporated under the laws of the State of Ohio — and that he was dismissed without reasonable notice or payment in lieu of notice. AirCFO is in the business of providing fractional accounting, finance, people operations, and tax professional services to venture-backed startup companies that operate solely in the United States. It has a client base across all 50 states and does not provide services directly to Canadian companies, though it does provide services indirectly to a few companies with Canadian subsidiaries.

Armstrong is also the principal of a numbered Canadian consulting company (the "Numbered Company"), with whom AirCFO contracted on January 25, 2021, to provide accounting services for the defendant's US-based customers. The consulting agreement consisted of four pages and 11 paragraphs and addressed, among other things, the consulting relationship, fees, expenses, the term of the contract, and termination. The business relationship ended abruptly on May 31, 2024, and Armstrong commenced this action for wrongful dismissal on April 3, 2025. Upon being served, AirCFO filed a Form 108 jurisdictional response on June 30, 2025, disputing the court's jurisdiction and, in the alternative, submitting that the court ought not to exercise jurisdiction over it.

Policy and legislative provisions at issue

Three contractual clauses were particularly relevant. Clause 5 of the consulting agreement designated the plaintiff's relationship with AirCFO as that of an independent contractor. Clause 11(b) confirmed that the agreement constituted the sole agreement of the parties and superseded all oral negotiations and prior writings. Clause 11(d) — the "Choice of Law Clause" — provided that the validity, interpretation, construction, and performance of the agreement would be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws. While AirCFO argued that this clause engaged the two-part test from Z. I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, the plaintiff countered that clause 11(d) was a choice of law clause only — not a forum selection clause — and both parties ultimately agreed on this characterization.

The governing legislative framework was the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28 (CJPTA), specifically ss. 3, 10, and 11. Section 3(e) provides that a court has territorial competence where there is a real and substantial connection between British Columbia and the facts on which the proceeding is based. Section 10 sets out a non-exhaustive list of presumptive connecting factors, including where contractual obligations were to a substantial extent performed in BC (s. 10(e)(i)) or where a business was carried on in BC (s. 10(h)). Section 11 provides the court with discretion to decline to exercise jurisdiction on forum non conveniens grounds. The plaintiff also raised the Employment Standards Act, R.S.B.C. 1996, c. 113 (ESA), arguing that the Choice of Law Clause was unenforceable to the extent it conflicted with minimum employment standards under BC law.

Reasoning and analysis

Justice Bennett found the Choice of Law Clause clear, unambiguous, valid, and enforceable. Given Armstrong's professional background as a certified professional accountant and the fact that it was his Numbered Company — not himself personally — that contracted with AirCFO, the court found it reasonable to conclude that he knew and understood the terms and practical consequences of the agreement, including the Ohio governing law provision. The court declined to resolve whether the ESA applied at this stage, noting that this depended on whether Armstrong was ultimately found to be an employee — a question that would need to be established at trial.

On the question of real and substantial connection, the court acknowledged that Armstrong had established a connection to British Columbia — he had lived there since 2011, was professionally registered as a certified professional accountant in BC, and performed all his work remotely from BC except for three trips to the United States (none of which were to Ohio). However, Justice Bennett found that AirCFO had satisfactorily rebutted the presumption of a real and substantial connection. The court reasoned that the main substance of Armstrong's services was to provide financial and tax-related advice to US-based companies and customers; the remote aspect of the work was therefore incidental to his contractual obligations. All of Armstrong's services were provided through the Numbered Company to a US-based company for US-based customers. The defendant was owned and operated solely in the United States, provided services only to US clients, had no Canadian employees, paid the Numbered Company in American dollars to a New York bank account, and did not deduct any Canadian taxes or statutory withholding fees. The court also noted that the two companies described by Armstrong as "Canadian operations" — Focal Systems and Gloss Genius — were in fact United States companies based in New York and California. On the totality of the evidence, the court found that Armstrong's BC residence and physical connection were, at best, incidental to his work obligations and constituted only a tenuous connection — insufficient to ground territorial competence under s. 3(e) of the CJPTA.

In the alternative, and having considered the forum non conveniens factors under s. 11(2) of the CJPTA, the court found that the balance of convenience favoured proceedings in the United States. The majority of witnesses — including all three of the defendant's anticipated witnesses — resided in the United States. AirCFO would be required to engage expert witnesses to interpret Ohio law before a BC court, adding complication and expense. The court also found that Armstrong's preference to litigate in BC was motivated by the prospect of greater remedies under the ESA and BC common law, and characterized this as forum shopping contrary to public policy. The loss of juridical advantage was accorded neutral weight, as it was contingent on Armstrong being found an employee — a finding not yet made.

Ruling and overall outcome

Justice L. Bennett stayed the action as against AirCFO, LLC pursuant to Rule 21-8, on the primary basis that the court lacked territorial competence to determine the matter, and in the alternative, on the grounds of forum non conveniens, with Ohio identified as the more appropriate forum. The defendant was the successful party. With respect to costs, AirCFO was found to be presumptively entitled to costs of both the application and the action; however, the court provided counsel the opportunity to make brief written submissions within 10 days of the order if they wished to dispute the costs order. No specific monetary amount was awarded or quantified in the judgment.