The recent decision of the Court of Appeal of Manitoba (the Court) in Fernandes v. Wal-Mart Canada Corp.1 contains an important statement of principle relating to the interaction between the traditional bases for jurisdiction, namely presence or consent based jurisdiction, and the presumptive connecting factors articulated by the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda2, which inform the real and substantial connection test for jurisdiction. The Court confirmed that both grounds for jurisdiction remain and that presence based jurisdiction fits into both categories. Where presence based jurisdiction is a presumptive connecting factors, it can be rebutted where the connecting factor “does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them”3. However, courts must also consider presence based jurisdiction within the traditional framework for jurisdiction, which does not allow for rebutting jurisdiction in the same way.

The case concerned a dispute between Wal-Mart and a former employee, who had worked for a six week period in Ontario. Wal-Mart moved to stay the action based on the Manitoba courts’ lack of jurisdiction. The motion judge held that the fact that Wal-Mart carried on business in Manitoba (where it operates stores) was a presumptive connecting factor (following the Van Breda test), but that that this presumptive connecting factor was rebutted because the operation of these stores did not create a connection a relationship between the subject matter of this action and the Province of Manitoba.

The Court held that, in so finding, the motion judge erred by conflating the traditional bases for jurisdiction with the Van Breda presumptive connecting factors. After an extensive analysis of the decisions in Van Breda and Chevron Corp. v. Yaiguaje4, the Court held that jurisdiction required either a real and substantial connection or one of the traditional bases and that where presence based jurisdiction (a traditional basis for jurisdiction) was established, there was no additional requirement to establish the existance of a presumptive connecting factor.

Chevron "soundly rejected the argument that jurisdiction to proceed against a corporation based solely on its carrying on business in the province was only a presumptive connecting factor that could be rebutted if there was no connection between the subject matter of the claim and the business being carried on" (para. 39). This reasoning was not limited to applications for the recognition and enforcement of foreign judgments (such as Chevron). Accordingly, although the motion judge considered Wal-Mart’s presence in Manitoba as part of a presumptive connecting factor analysis, the motion judge erred in law by not separately considering the traditional grounds for jurisdiction, which could not be rebutted.

The Court nonetheless found that Ontario was the most convenient forum and therefore stayed the action. This was despite the fact that the Ontario limitation period had probably expired (the Court found that the decision by the plaintiff not to commence a protective action in Ontario had been a tactical one). The action otherwise had a much stronger connection to Ontario. Accordingly, while the Court clarified the approach to be applied when there is presence based jurisdiction, the action was still stayed.