Executive Summary: Key Legal and Evidentiary Issues

• Jurisdiction of Québec courts challenged via a declinatory exception under art. 167 C.p.c. regarding a cross-provincial cannabis sales dispute.
• Determination that contractual obligations—delivery of cannabis and payment of the price—were to be performed entirely in Ontario, not in Québec.
• Application of art. 3148 C.c.Q. to reject Québec jurisdiction in an international private law context, despite a Québec-domiciled seller and alleged economic loss in Québec.
• Assessment of whether a purely financial loss recorded in Québec can ground jurisdiction, distinguishing accounting impact from where the real prejudice is substantively suffered.
• Consideration of the buyer’s non-payment and alleged product contamination only as background to jurisdiction, without reaching the merits of liability or breach of warranty.
• Refusal to award procedural sanctions under art. 342 C.p.c., as requesting a hearing of more than one hour was not deemed a sufficiently serious procedural misconduct.

Factual background

Oaziz Extracts Inc. (Oaziz) is a cannabis company domiciled in Québec and active in the sale and distribution of cannabis products. Blizza Brands Inc. (Blizza) is an Ontario-domiciled company with its warehouse and operations situated in Ontario. The dispute arises from a verbal agreement between the parties for the sale and delivery of cannabis in significant commercial quantities.
On 20 January 2025, following this oral agreement, Oaziz shipped and delivered a first portion of the order—40.21 kilograms of cannabis—to Blizza’s warehouse in Ontario. At Blizza’s request, the remaining quantity was shipped on 31 January 2025, bringing the total delivered volume to 128.78 kilograms. All deliveries were completed to Blizza’s Ontario facility, in accordance with the parties’ understanding that the cannabis was destined for that province.
Shortly after receipt of the second shipment, on 3 February 2025, Blizza complained to Oaziz about a potential contamination of the second consignment. Blizza indicated that it wished to return the product, asserting that the cannabis was infected and therefore unfit to be commercialised. Oaziz denied any defect and refused the return, maintaining that the goods conformed to the parties’ agreement and that Blizza remained bound to pay the agreed price.
Despite discussions, Blizza refused to pay the outstanding balance, relying on its allegations of contamination and on the legal warranty of quality. Oaziz treated this as an unjustified refusal to pay and as a wrongful withholding of sums owing. On 31 March 2025, Oaziz commenced an action in the Superior Court of Québec, in the judicial district of Montréal, claiming $104,445.90 representing the unpaid price of cannabis delivered, plus legal expenses allegedly incurred to recover its debt.

Procedural posture and declinatory exception

In response, on 31 July 2025, Blizza raised a declinatory exception (moyen déclinatoire) under art. 167 of the Code of Civil Procedure (C.p.c.). By this procedural mechanism, a defendant may request that a court decline jurisdiction and refer the matter to a competent tribunal, or dismiss the action if no such tribunal is identified. Blizza argued that Québec courts lacked jurisdiction ratione materiae (jurisdiction of attribution) to hear the dispute and asked that the file be transferred to the Superior Court of Justice in Ontario.
Blizza’s position was that it had no establishment in Québec, was domiciled in Ontario, and that the contract between the parties was formed and executed there. On that basis, it contended that only Ontario courts were competent to adjudicate the dispute. Oaziz, by contrast, claimed that the verbal contract was concluded in Montréal, where its representative obtained Blizza’s consent by telephone. Invoking art. 42 C.p.c., Oaziz submitted that the alleged damage was suffered in Québec and that, for reasons of proper administration of justice, Québec courts should assume jurisdiction.

Governing legal framework on jurisdiction

The court began its analysis with art. 167 C.p.c., which allows a party to seek referral to a competent tribunal or dismissal where the action has been instituted before a court lacking jurisdiction. The key question was therefore whether, as a matter of private international law, the Superior Court of Québec had jurisdiction to hear a personal action of a patrimonial nature arising from a cross-border contract between a Québec seller and an Ontario buyer.
The judge emphasised that arts. 41 to 48 C.p.c., including art. 42 (often relied on to determine territorial competence within Québec), govern only internal territorial jurisdiction among Québec districts. These provisions do not themselves establish the international or interprovincial jurisdiction of Québec courts. Consequently, art. 42 C.p.c. could not be used to ground jurisdiction over a dispute involving an Ontario-domiciled defendant and contractual performance in Ontario. The internal territorial rules only become relevant once it is established that Québec authorities, as such, are competent.
Instead, the applicable framework was art. 3148 of the Civil Code of Québec (C.c.Q.), which sets out when Québec authorities are competent in personal actions of a patrimonial nature. Under that article, jurisdiction may rest on several connecting factors, including the defendant’s domicile in Québec, the existence of a Québec establishment engaged in the relevant activity, the commission of a fault or occurrence of prejudice in Québec, or the fact that one of the contractual obligations must be performed in Québec.

Analysis of contractual obligations and place of performance

Neither party argued that Blizza was domiciled in Québec or maintained a relevant establishment there, so the focus turned to whether either a contractual obligation was to be performed in Québec or a qualifying prejudice was suffered there. The court underlined that the place of contract formation—such as where a telephone acceptance was received—is not a connecting factor recognised by art. 3148 C.c.Q. for jurisdictional purposes. The Canadian jurisprudence similarly confirms that the locus of contract conclusion does not, on its own, anchor jurisdiction.
The judge adopted the prevailing approach that the obligation relevant for jurisdictional purposes is the principal contractual obligation, rather than incidental or preparatory operations. In prior case law, Quebec courts have held that if a seller’s essential obligation is to deliver and install equipment at an out-of-province site, then the fact that the equipment was manufactured in Québec is merely incidental and does not render Québec a place of contractual performance.
Applying this reasoning, the court found that Oaziz’s main contractual obligation was to deliver cannabis to Blizza’s warehouse in Ontario. All deliveries were in fact made to Ontario, where the goods were to be commercialised. Any handling, packaging or preparation of cannabis that took place in Québec was considered incidental to the core obligation under the verbal agreement: delivery in Ontario. As such, no contractual obligation was to be performed in Québec within the meaning of art. 3148(3) C.c.Q.
On the payment side, the court noted art. 1734 C.c.Q., which provides that the buyer must take delivery of the sold property and pay the price at the time and place of delivery. Given that delivery occurred in Ontario, the place of payment was likewise Ontario. Therefore, the obligation to pay the purchase price was not to be performed in Québec but in Ontario, further weakening any jurisdictional link with Québec courts.

Economic loss and alleged prejudice in Québec

Oaziz argued that it suffered a financial loss in Québec because Blizza’s refusal to pay and its unilateral withholding of sums—purportedly invoking the warranty of quality—affected Oaziz’s patrimony in Québec. On that basis, the seller contended that the prejudice should be seen as occurring in Québec, which would bring the dispute within art. 3148(3) C.c.Q. (prejudice suffered in Québec).
The court rejected this characterization, reinforcing a line of authority that distinguishes between (i) prejudice that is substantively suffered in Québec and (ii) mere accounting consequences of a loss recorded in Québec by a company whose assets are located there. The fact that a Québec-based business books an economic loss locally does not, by itself, transform an out-of-province contractual non-payment into a Québec-based prejudice.
In this case, both the performance of the contract (delivery) and the corresponding obligation to pay were located in Ontario. The alleged non-payment and the effects of the dispute were fundamentally tied to the Ontario-based transactional context. The purely financial impact on Oaziz’s books in Québec did not suffice, in the court’s view, to establish that the prejudice was “suffered” in Québec for the purposes of art. 3148 C.c.Q.

Conclusion on jurisdiction and disposition of the main claim

Having concluded that no contractual obligation was to be performed in Québec and that the alleged prejudice was not properly characterized as occurring in Québec, the court held that none of the jurisdiction-conferring grounds in art. 3148 C.c.Q. were met. The Québec Superior Court therefore lacked jurisdiction ratione materiae to hear Oaziz’s action.
As a result, the judge granted Blizza’s declinatory exception. Rather than transferring the file, the court dismissed Oaziz’s originating application against Blizza for lack of jurisdiction. This had the effect of entirely defeating the plaintiff’s claim in Québec for the $104,445.90 allegedly owed for the cannabis deliveries, without any adjudication on the underlying merits of contamination, conformity, or breach of warranty of quality.

Request for procedural sanctions under article 342 C.p.c.

In addition to disputing jurisdiction, Blizza sought an award of $1,000 against Oaziz under art. 342 C.p.c., which empowers courts to sanction significant procedural defaults. Unlike art. 54 C.p.c., which is more closely tied to compensating prejudice, art. 342 C.p.c. is concerned with imposing a sanction proportionate to the seriousness of a party’s procedural misconduct.
Blizza argued that Oaziz improperly insisted on scheduling a hearing of more than one hour to argue the declinatory exception, even though, in its view, less than an hour was sufficient and ultimately required. The defendant maintained that this unnecessarily prolonged the proceeding and caused inconvenience and delay, particularly given that its representative was travelling from outside the jurisdiction.
The court examined these circumstances and accepted the explanations offered by Oaziz’s counsel. The plaintiff’s lawyer believed in good faith that more than one hour might be necessary, taking into account reading time and argument, and wanted to ensure that the matter could be completed in a single sitting. The judge held that such conduct did not amount to a “manquement d’une certaine gravité” (a fault of sufficient gravity) or anything more than trivial in the sense required by art. 342 C.p.c. Consequently, the request for $1,000 in sanctions was dismissed.

Overall outcome and financial consequences

In the final orders, the court allowed the declinatory exception, dismissed the originating application of Oaziz against Blizza for lack of jurisdiction, and rejected Blizza’s separate request for sanctions under art. 342 C.p.c. The decision concluded with an order for costs against the plaintiff, awarding judicial costs in favor of Blizza. However, the judgment did not specify the exact monetary quantum of those costs, which are left to be determined by the applicable tariff or subsequent taxation process. As a result, Blizza Brands Inc. emerges as the successful party, defeating the $104,445.90 claim in Québec and obtaining an order for its costs, but the precise total amount ultimately awarded in its favour cannot be determined from the judgment text alone.