Executive Summary: Key Legal and Evidentiary Issues

• Jurisdiction of the Québec Superior Court hinged on whether Ma and Wu, as personal guarantors, were bound by the franchise contract’s Montreal forum selection clause.
• The court interpreted the personal guarantee and sublease annexes as incorporating the franchise agreement terms, extending the Quebec forum and Quebec law choices to the individual guarantors.
• MTY’s claim combined unpaid rent and related charges under a commercial sublease with unpaid royalties and advertising contributions under the franchise agreement.
• Arguments that Ontario courts were a more appropriate forum (forum non conveniens) failed because the parties had expressly chosen Quebec courts and no “exceptional” circumstances justified overriding that choice.
• The defendants’ reliance on Ontario’s Arthur Wishart Act to invalidate the Quebec choice-of-law and forum clauses was rejected, as Quebec conflict rules and the specific wording of the Act did not displace the agreed Quebec law.
• The court emphasized efficiency and coherence by keeping all interconnected disputes (franchise, sublease, guarantees) before one court, avoiding fragmented litigation across Quebec and Ontario.

Factual background and contractual framework

MTY Franchising Inc., a franchisor headquartered in Saint-Laurent, Québec, operates several quick-service restaurant networks, including the Thai Express brand. In 2012, it entered into a franchise agreement with 2280548 Ontario Ltd. to operate a Thai Express outlet in the Eastgate Square shopping mall in Stoney Creek, Ontario. The corporate franchisee was controlled by Jin Wei Ma and Bing Mei Wu, who were identified as its only officers, directors, and shareholders. They signed the franchise agreement on behalf of the corporation.
The franchise relationship was structured through a primary lease and a sublease. MTY held the head lease from Eastgate Square Holdings Inc. for the premises and then sublet the space to 2280548 Ontario Ltd. via an “Agreement of Sub-Lease” (Annex F). Under that sublease, MTY was granted all the landlord’s rights and remedies under the main lease and also “all the rights and recourses of a Lessor according to the laws in force in the Province of Quebec,” particularly over property located on the rented premises.
Ma and Wu also executed a separate “Personal guarantee of officers, shareholders and directors of a company” (Annex E). In this guarantee, they acknowledged having read and understood the entire franchise agreement and agreed to be bound by all of its terms and conditions “as if each of us was the Franchisee.” They further undertook to pay all amounts owed by the franchisee and to perform all obligations that 2280548 Ontario Ltd. was required to perform under the franchise agreement and any related agreements, expressly stating that they “shall be bound […] in the same manner as if each of us were the Franchisee under the Franchise Agreement.”
The franchise agreement was for a 10-year term, from 1 September 2012 to 31 August 2022. In practice, 2280548 Ontario Ltd. allegedly ceased operating the Thai Express outlet in March 2020, more than two years before expiry. MTY alleged that the premises were left in unsanitary condition and that the franchisee defaulted on rent and related charges under the sublease, as well as on royalties and contributions to the advertising fund under the franchise agreement.

The monetary claim and the proceedings in Quebec

In April 2024, MTY sued 2280548 Ontario Ltd., Ma, and Wu in the Québec Superior Court. Its original claim focused on recovery of unpaid rent and related amounts that MTY said it had to pay to the landlord under the head lease. Later, after Ma and Wu challenged jurisdiction, MTY amended its originating application in November 2024 to expressly include both lease-related and franchise-related amounts in a single claim of CAD 157,001, plus contractual interest at 26% and additional indemnity.
The total of CAD 157,001 was made up of two broad components. First, MTY claimed CAD 135,522 for rent arrears and associated charges (such as cleaning, pest control, and water consumption) it said it had paid to the landlord on behalf of the tenant. From that amount, MTY credited CAD 9,980 for the buyback of certain equipment, leaving a net balance of CAD 125,542 claimed on the rent side. Second, it claimed CAD 35,549 as compensation for unpaid franchise royalties and advertising fund contributions allegedly accrued during the life of the franchise agreement.
The corporate defendant, 2280548 Ontario Ltd., did not respond to the proceeding, and MTY sought default judgment against it. The default inscription was referred to the clerk. The live controversy before the judge in this decision concerned only Ma and Wu’s application to contest the Québec court’s jurisdiction and to have the case sent to Ontario, where they reside and where the franchise had been operated.

Forum selection, choice of law, and the reach of the franchise contract

The central legal issue was whether the Québec Superior Court had jurisdiction over Ma and Wu personally. Article 3148 of the Civil Code of Québec provides, among other things, that Québec courts are competent where “the parties, by convention, have submitted to them the disputes which have arisen or may arise between them in respect of a specified legal relationship.” The franchise agreement included both a choice-of-law clause and a forum selection clause designating Quebec.
Clause 31 (“Applicable laws and judicial district”) stated that the agreement would be “concluded in accordance with and governed by the laws of the Province of Quebec and the Federal laws applicable herein.” It further provided that “[o]nly the court of the Judicial District of Montreal shall have jurisdiction in any matter arising under or out of this agreement or any other agreement or covenant pursuant to this agreement,” and that proceedings against the franchisee must be brought in that judicial district. This was a classic election of forum (choice-of-court) clause favouring Montreal.
It was uncontested that this clause bound MTY and 2280548 Ontario Ltd. as parties to the franchise contract. The dispute concerned whether and how this clause extended to Ma and Wu. They argued that the rent claim was based on the sublease (Annex F), which had no explicit forum clause, and that the royalties claim was based on the personal guarantee (Annex E), which also lacked an express forum selection provision. They contended that no connecting factor under article 3148 C.c.Q. established Québec’s jurisdiction over them personally and, in the alternative, that the court should decline jurisdiction in favour of Ontario on forum non conveniens grounds.
The judge held that MTY did not need to show separate jurisdictional bases for each cause of action against Ma and Wu. Jurisdiction must be assessed globally in respect of each defendant; jurisdiction over one cause of action is generally sufficient to cover the entire proceeding against that defendant, absent a statutory or contractual carve-out. In addition, the wording of the franchise forum clause was broad: it covered not only matters “arising under or out of” the franchise agreement itself but also matters arising out of “any other agreement or covenant pursuant to this agreement.”

Impact of the personal guarantee and sublease annex on jurisdiction

The court’s key evidentiary and interpretive task was to read the personal guarantee (Annex E) and sublease (Annex F) in context. The guarantee made Ma and Wu personally liable “as if each of us was the Franchisee,” expressly binding them to abide by the entire franchise agreement and perform all obligations of the franchisee. The guarantee also stated that they would be “bound […] in the same manner as if each of us were the Franchisee under the Franchise Agreement.” On a straightforward reading, those phrases mean the guarantors agreed to step into the franchisee’s shoes, including as to procedural and jurisdictional clauses.
As to the sublease, the court noted that it was physically annexed to and integrated with the franchise agreement, executed on the same date, and explicitly referred back to the franchise contract. Commercially, the franchise would be meaningless without premises to operate in, and the premises would be of no use to the franchisee without the right to run the franchised business there. The judge described the two contracts as “indissociable,” such that the sublease plainly qualified as an “agreement or covenant pursuant to” the franchise agreement for purposes of the forum clause.
This analysis led the court to hold that the franchise agreement’s forum selection clause applied not only to disputes directly based on the franchise agreement (for example, unpaid royalties and advertising contributions) but also to disputes arising from associated contracts like the sublease, as long as they were functionally and contractually linked to the franchise relationship. By signing the guarantee, Ma and Wu accepted to be bound by the franchise agreement’s clauses, including the Montreal forum clause, in the same way as the corporate franchisee.
The judge emphasized that Quebec private international law favours respecting the parties’ autonomy and giving robust effect to a mutually agreed forum selection clause, rather than searching for ways to restrict its reach. In commercial relationships, parties seek legal certainty by designating a forum able to hear the full range of disputes that may arise between them. Splitting interconnected disputes across multiple jurisdictions would undermine efficiency and invite inconsistent results, contrary to the presumption that commercial parties intend comprehensive jurisdiction in their chosen forum.

Forum non conveniens and the Ontario connections

Ma and Wu argued in the alternative that, even if Québec technically had jurisdiction, the court should decline to exercise it under article 3135 C.c.Q. based on the doctrine of forum non conveniens. They pointed to several Ontario-based factors: they and the corporate franchisee are domiciled in Ontario; the franchise was operated in Ontario; the leased premises and likely several witnesses (including representatives of the landlord and franchisee) are in Ontario; and any judgment against them would likely need to be recognized and enforced there because they allegedly had no assets in Québec.
The court accepted that Ontario had significant connections to the dispute and that Ontario courts would probably have jurisdiction based on domicile. It also inferred that some, perhaps many, witnesses were located in Ontario. However, the judge stressed that forum non conveniens demands more than showing a foreign forum with some or even many links—it requires a clear, exceptional case where another jurisdiction is demonstrably more appropriate and where concentrating the litigation abroad better serves order and fairness in an international sense. There is a strong presumption in favour of the forum chosen by the plaintiff, and in this case that presumption was reinforced by an express forum selection clause in favour of Quebec.
The existence of that clause was treated as a critical factor. Using forum non conveniens to override a contractually chosen Quebec forum risks undermining party autonomy and legal predictability. The Québec Court of Appeal has cautioned that resorting to article 3135 C.c.Q. when a valid Quebec forum clause exists should be “even more exceptional” than in ordinary cross-border cases, absent a direct challenge to the clause’s validity under the general law of contracts. Here, Ma and Wu did not attack the clause itself (for example, as abusive or unconscionable); instead, they effectively sought to sidestep it based on convenience and Ontario connections.
The judge held that, viewed globally, the interests of justice and the parties did not justify sending the case to Ontario. Keeping the case in Quebec avoided fragmented proceedings, since MTY was already pursuing default judgment in Quebec against 2280548 Ontario Ltd. If the claim against Ma and Wu were pushed to Ontario, MTY would need to conduct parallel litigation in two provinces over the same underlying obligations, which would increase cost and complexity and risk divergent outcomes.

Debate over applicable law and the Arthur Wishart Act

An additional layer of complexity concerned applicable law. The franchise agreement expressly chose Quebec law, while the sublease did not contain a specific choice-of-law clause. Under article 3111 C.c.Q., a contract is governed by the law it designates; only in the absence of such a designation does the court apply the “closest connection” test. The court therefore held that Quebec law governed the franchise agreement. The sublease, on the other hand, was more closely connected to Ontario in terms of subject-matter and location of the property, and the judge accepted that Ontario law would generally govern it. Yet the sublease also “contractualized” aspects of Quebec landlord-tenant law by expressly granting MTY all rights and remedies of a Quebec landlord, so Quebec law would inevitably play a role in its interpretation.
Ma and Wu invoked Ontario’s Arthur Wishart Act (Franchise Disclosure), arguing that section 10 of that statute nullified contractual provisions restricting the application of Ontario law or restricting jurisdiction or venue to a foreign forum in franchise disputes. They claimed this provision invalidated the franchise agreement’s Quebec choice-of-law and Montreal forum clauses. The court rejected this position on two fronts.
First, the determination of applicable law in a Quebec court is a matter of Quebec conflict-of-laws rules, not Ontario’s. The court applied article 3111 C.c.Q. and concluded that the parties’ explicit designation of Quebec law for the franchise agreement must be respected. The Arthur Wishart Act could not, by itself, displace that result at the level of Quebec’s own conflicts methodology.
Second, even on its own terms, section 10 of the Arthur Wishart Act is more limited than Ma and Wu suggested. It does not categorically prohibit franchise contracts from being governed by non-Ontario law or litigated outside Ontario; rather, it makes such limiting clauses “void with respect to a claim otherwise enforceable under this Act in Ontario.” In other words, the provision is aimed at ensuring that a franchisee can still invoke the substantive protections of the Act in Ontario proceedings. In this case, Ma and Wu did not articulate how they would rely on the Arthur Wishart Act in the context of MTY’s Quebec claim, nor did they show that any such claim was actually at play.
The possibility that Ontario law might govern some aspects of the sublease did not carry much weight in the forum non conveniens analysis. The judge noted that Quebec courts are fully capable of applying foreign law in international cases, particularly in a Canadian common law province whose legislation and case law are readily accessible. Conversely, sending the dispute to Ontario would simply reverse the challenge, obliging Ontario courts to apply Quebec law to the franchise agreement and to the Quebec-law concepts incorporated into the sublease.

Outcome, successful party, and financial consequences

In the final analysis, the Québec Superior Court firmly upheld its jurisdiction over Ma and Wu. The judge found that, by virtue of the personal guarantee and the integrated nature of the franchise documents, the two individual defendants were bound by the Quebec forum selection clause to the same extent as 2280548 Ontario Ltd. As a result, the court had jurisdiction over MTY’s combined claim for unpaid rent, related charges, royalties, and advertising contributions.
The court further found that Ma and Wu had not established the “exceptional” circumstances required to justify declining jurisdiction in favour of Ontario under the doctrine of forum non conveniens. Factors such as their residence in Ontario, the Ontario location of the business, and the probable need to enforce any judgment there were not sufficient to override the express forum clause and the judicial economy achieved by keeping all related disputes in a single Quebec proceeding.
Accordingly, the court dismissed the “Amended application for a declinatory exception for lack of jurisdiction, and to dismiss” brought by Ma and Wu, with costs. MTY Franchising Inc. is therefore the successful party in this decision. However, this judgment does not decide the merits of MTY’s CAD 157,001 monetary claim and does not specify any lump-sum amount of costs or damages. The only financial order is that Ma and Wu must pay MTY’s legal costs for the declinatory motion, but the exact amount of those costs is not fixed in the judgment and cannot be determined from this decision alone.