Home Featured B.C. court denies former CEO’s bid to dismiss lawsuit over jurisdiction dispute

B.C. court denies former CEO’s bid to dismiss lawsuit over jurisdiction dispute

by HR Law Canada

The former president and CEO of Krahn Engineering has failed in his legal bid to dismiss a lawsuit on jurisdictional grounds.

The ruling from the Supreme Court of British Columbia highlighted a complex web of corporate commitments that spanned across provincial borders, emphasizing the “real and substantial connection” between the province and the facts of the case.

Background

Krahn Engineering Ltd., a company headquartered in Abbotsford, B.C., initiated legal action against G.B., its former president and CEO, after his dismissal in late 2023.

The lawsuit alleges that G.B. violated his fiduciary and contractual duties during his tenure at the company. The legal dispute centers on whether the British Columbia court holds jurisdiction over G.B., who argued that the court in Alberta should oversee the matter, referencing a forum selection clause in a “Letter of Intent” signed at the start of his employment.

“This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable in that Province and shall be treated, in all respects, as an Albertan contract. Each of the Parties agrees that any action or proceeding related to this Agreement or the transactions contemplated herein may (but need not) be brought in any court of competent jurisdiction in the Province of Alberta, and for that purpose hereby attorns and submits to the jurisdiction of such Alberta court,” it said.

Judicial analysis

Despite G.B.’s contention, the court found substantial corporate and operational ties to British Columbia, notably that significant company activities and decision-making occurred within the province.

At the heart of the jurisdictional debate was the nature of his employment agreement, specifically the forum selection clause which suggested Alberta as a potential jurisdiction for legal disputes.

However, the court determined this clause to be non-exclusive, meaning it did not bind the parties to Alberta exclusively. This interpretation allowed the British Columbia court to maintain jurisdiction over the proceedings.

Court’s decision

The court ruled against G.B.’s application to move the case to Alberta, citing that the factors required to override the presumed jurisdiction of British Columbia were not sufficiently met.

It was noted that while he argued for Alberta based on convenience and legal tradition specified in the employment contract, these reasons alone did not surpass the threshold set by precedents for altering jurisdiction.

For more information, see Krahn Engineering Ltd. v Bit, 2024 BCSC 1069 (CanLII)

You may also like

About Us

HR Law Canada is dedicated to covering labour and employment news for lawyers, HR professionals and employers. Published by North Wall Media.