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Jan 23, 2012

The Appropriate Jurisdiction - Is there a "Real and Substantial Connection" to Ontario?

David Taub and Dominique Michaud of our litigation department successfully represented the
Plaintiffs, Nadi Inc. and Nadi International Ltd., in the case of Nadi Inc. v. Montazemi-Safari,
2012 ONSC 4723 (CanLII) on a motion by the Defendants to stay our client’s action on the
basis that Dubai – not Ontario – was the appropriate jurisdiction to have the action heard and
that the Plaintiff’s action was an “abuse of process”.

The case involves a claim by the Plaintiffs to reinstate a collateral mortgage that it discharged
due to an allegedly fraudulent scheme whereby the Defendants purported to transfer to Nadi two
commercial condominium units to be constructed in Dubai as part payment for amounts owing
on a commercial real estate transaction for the sale of land in Ontario. The purchase price for the
two units was to have been paid into escrow as security, but Nadi says that there was no security
and the two units were never built, leaving it with nothing.

The Defendants attempted to have the action stayed on the basis that the substance of the action
dealt with real property in Dubai so the Ontario Court did not have the proper jurisdiction to hear
the action.

The Judge agreed that the essence of Nadi’s claim is that it released its interest in the Ontario
lands based on fraudulent misrepresentations by the Defendants and that the condominium units
in Dubai were the consideration for the release of Nadi’s interests in Ontario. Accordingly, it was
inaccurate for the Defendants to characterize the claim as entirely about title to real estate in
Dubai and that the action had a “real and substantial connection” to Ontario.

This decision is important because it reinforces the established principle that the characterization
of the action is a critical step in assessing whether the Ontario Court can assume jurisdiction of
an action.

Related Practice Areas

Litigation & Dispute Resolution

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