Executive Summary: Key Legal and Evidentiary Issues

• An Iowa resident sued a Manitoba corporation for breach of a share subscription agreement, and its UK-based director personally under the oppression remedy in s. 234 of The Corporations Act.
   
• The defendants challenged the Court's jurisdiction and sought a stay, arguing that Norgrow was operated from the United Kingdom and that Mr. Rosenthal has no presence or domicile in Manitoba.
   
• Article 7.1 of the Agreement, under which the parties attorn to the non-exclusive jurisdiction of Manitoba's courts, was found to give the Court consent-based jurisdiction over both defendants.
   
• A September 1, 2022 agreement said to allow Norgrow to select the forum was never put into evidence, leaving the Court no basis to find the Agreement's clause inoperative.
   
• Presumptive connecting factors under the Van Breda test, including Norgrow's Manitoba domicile and Mr. Rosenthal's role as a registered director of a Manitoba corporation, were not rebutted.
   
• Allegations that the director made misleading representations, withheld funds, and acted in bad faith were held to disclose a reasonable cause of action against him personally.
   

Facts of the case

Christine Redenius lives in Belmond, Iowa. She says that on or about June 10, 2021, she entered into a share subscription agreement (the Agreement) with Norgrow Canada Inc., a corporation incorporated in Manitoba with its registered office in Winnipeg. Henri Rosenthal is a director and shareholder of Norgrow, a British citizen, and a resident of the United Kingdom.

Ms. Redenius alleges that Norgrow failed to comply with the Agreement, and she sued it for breach. She also claimed against Mr. Rosenthal personally. Her claim alleges that as a director and officer, he acted oppressively, in a manner unfairly prejudicial to her, and in unfair disregard of her interests as a shareholder, contrary to s. 234 of The Corporations Act, C.C.S.M. c. C225. Her pleading states that Mr. Rosenthal repeatedly assured her that her returns were "guaranteed" and that she could withdraw her capital at any time after an initial one-year term. According to the pleading, his refusal to return her money without a court order breached her reasonable expectations.

She filed the statement of claim on September 8, 2025, and moved to validate service on October 24, 2025. On November 25, 2025, the defendants moved to strike or stay the action, alleging abuse of process, improper service, lack of procedural fairness, and lack of jurisdiction. The next day, Senior Associate Judge Clearwater granted an order (the 2025 Order) with four main effects:

• It validated service of the claim on the defendants, and of the defendants' motion materials on the plaintiff.
• It set email and UK mail arrangements for future service on the defendants.
• It dismissed the abuse of process, improper service, and procedural unfairness grounds.
• It adjourned the jurisdiction challenge and stayed the defendants' obligation to file a defence until that challenge was decided.

On March 24, 2026, the defendants brought a further motion under Rule 21.01 to remove Mr. Rosenthal as a defendant or, alternatively, to strike the claim against him. Ms. Redenius moved on April 13, 2026, to lift the stay and require a defence within 20 days. At a case management conference on May 19, 2025 [date as stated in the decision; it precedes the September 8, 2025 filing of the claim], the parties agreed to have the three motions heard sequentially at a contested hearing scheduled for June 8, 2026.

Policy and legislative provisions at issue

Article 7.1 of the Agreement provides that it is governed by and construed under the laws of Manitoba and the federal laws applicable there. It also states that the parties attorn to the non-exclusive jurisdiction of the Manitoba courts for any actions arising out of the Agreement.

The oppression claim against Mr. Rosenthal rests on s. 234 of The Corporations Act. The defendants' motions relied on two rules of the Court of King's Bench Rules. Rule 21.01 permits the determination of a question of law raised by a pleading where doing so may dispose of all or part of the action, shorten the trial, or save costs. Rule 25.11(d) permits a claim to be struck for failing to disclose a reasonable cause of action.

Reasoning and analysis

Justice Woolley separated two questions. The first was whether the Court had jurisdiction, which is a binary question involving no discretion. The second was whether the Court should decline to exercise that jurisdiction under the doctrine of forum non conveniens.

On presence-based jurisdiction, a corporate search showed that Norgrow had been an active Manitoba corporation continuously since July 24, 2019. Its registered office was in Winnipeg, although its mailing address was in the United Kingdom. Because Norgrow was present in Manitoba when the 2025 Order was pronounced, the Court had presence-based jurisdiction over it. Norgrow's annual returns listed Mr. Rosenthal's mailing address as Box 46122, Westdale, Winnipeg. Even so, there was no evidence that he was present in Manitoba when the order was made, so presence-based jurisdiction did not extend to him.

Consent-based jurisdiction reached both defendants. The defendants asserted that a September 1, 2022 agreement had superseded the Agreement and allowed Norgrow to select the forum for disputes. Neither party put that document into evidence. The claim was pleaded on the Agreement, which was the only agreement before the Court. Applying the two-step test from Douez v. Facebook, Inc., 2017 SCC 33, and Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, the judge found Article 7.1 straightforward and unambiguous. The "non-exclusive" wording only recognized that another forum might also claim jurisdiction. There was no suggestion of fraud, inequality of bargaining power, or unconscionability.

Because the clause covers "any actions arising out of" the Agreement, it extends beyond breach claims to tort or statute-based claims involving actions taken under the Agreement. The oppression claim against Mr. Rosenthal was factually intertwined with the contract claim against Norgrow. Relying on Novatrax International Inc. v. Hägele Landtechnik GmbH, 2016 ONCA 771, the judge held that the clause governed the oppression claim even though Mr. Rosenthal was not personally a party. The defendants provided no "strong cause" to avoid it.

Jurisdiction was also established on an assumed basis under Club Resorts Ltd. v. Van Breda, 2012 SCC 17. The judge noted that under Sinclair v. Venezia Turismo, 2025 SCC 27, a defendant does not bear a "heavy" burden to rebut a presumptive connecting factor. Norgrow's creation as a Manitoba corporation in 2019 and its annual renewal meant it was domiciled in Manitoba. Mr. Rosenthal's ongoing service as a director and officer of a Manitoba corporation also connected him to the province. Further connections came from the claim itself. The cause of action against Mr. Rosenthal is based on Manitoba law. The share purchase closed at Norgrow's Winnipeg registered office, and the Agreement required notices, including disputes, to be sent to that office.

The only rebuttal offered was that the company was operated from the United Kingdom and that Mr. Rosenthal has no physical presence in Manitoba. The judge found this insufficient. Norgrow had at all times chosen Manitoba as its home jurisdiction. Mr. Rosenthal had few connections to Manitoba, but the ones that existed were important: he was registered as a director and officer of Norgrow and had updated that registration annually using a Manitoba address. It was reasonable for both defendants to expect to answer claims in Manitoba.

On forum non conveniens, the defendants proposed the courts of England and Wales. Neither Ms. Redenius nor Mr. Rosenthal lives in Manitoba, so a Manitoba trial would put both sides to a similar level of inconvenience. Moving the case to England and Wales would require only the plaintiff to travel. Article 7.1 selects Manitoba law, and the oppression claim requires interpreting a Manitoba statute. There was no evidence of an action by the plaintiff in another forum, or of any action planned by the defendants, so the risk of multiple proceedings or conflicting decisions appeared low. The judge also found it highly unusual to refer a claim against a Manitoba corporation involving a Manitoba statute to the courts of England and Wales. Circumstances justifying that course might arise in some cases, but they were not present here.

On the claim against Mr. Rosenthal, the Rule 21.01 question was whether a director can in law be personally liable for oppression. The judge relied on Wilson v. Alharayeri, 2017 SCC 39, and 63833 Manitoba Corporation v. Cosman's Furniture (1972) Ltd. et al., 2018 MBCA 72, which applies the two-part test from Budd v. Gentra Inc. Under that test, the oppressive conduct must be properly attributable to the director, and personal liability must be fit in all the circumstances. Personal benefit and bad faith are among the relevant factors. Personal liability was therefore legally possible.

Under Rule 25.11(d), the judge applied the "plain and obvious" standard from R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42. Following Nygard v. Canadian Broadcasting Corporation, 2026 MBCA 36, the judge considered the pleading alone and read it generously. Paragraphs 18 to 22 of the statement of claim, read with the rest of the pleading, allege four things against Mr. Rosenthal, acting as a director:

• He made false or misleading representations about the Agreement.
• He failed to release funds in breach of the Agreement.
• He acted in bad faith.
• He placed his own interests before hers.

Although these allegations are unproven, they were held to form the basis of a reasonable cause of action.

Ruling and overall outcome

Ms. Redenius was the successful party. The defendants' jurisdictional challenge failed: Justice Woolley found that the Court has jurisdiction over both Norgrow and Mr. Rosenthal, and that the defendants had not shown the Court should defer to the courts of England and Wales. The motion to remove Mr. Rosenthal or strike the claim against him under Rules 21.01 and 25.11(d) was dismissed. The stay in the 2025 Order was lifted, and the defendants must file their statement of defence within 30 days of the September 16, 2026 reasons, rather than the 20 days Ms. Redenius requested. No monetary amount was awarded. Costs were not fixed; if the parties cannot agree, they may speak to costs after filing briefs in advance.