IN THE SUPREME COURT OF BRITISH COLUMBIA  
Citation:  
Leaf v. Hershey Canada Inc.,  
2022 BCSC 1094  
Date: 20220629  
Docket: S202785  
Registry: Vancouver  
Between:  
And  
Scott Leaf  
Plaintiff  
Hershey Canada Inc., The Hershey Company and  
Hershey Chocolate & Confectionary Corporation  
Defendants  
Before: The Honourable Justice Ahmad  
Reasons for Judgment  
In Chambers  
Counsel for the Plaintiff:  
A. Tanel  
N. Gondek  
Counsel for the Defendants:  
S. Maidment  
J. Dent  
Place and Date of Hearing:  
Place and Date of Judgment:  
Vancouver, B.C.  
December 8-9, 2021  
Vancouver, B.C.  
June 29, 2022  
Leaf v. Hershey Canada Inc.  
Page 2  
Paragraph  
Range  
Table of Contents  
I. INTRODUCTION  
[1] - [4]  
[5] - [11]  
[12] - [77]  
[12] - [52]  
[12] - [21]  
II. LEGAL FRAMEWORK  
III. ANALYSIS AND DISCUSSION  
1. Does the proceeding concern a tort committed in British Columbia?  
a) Have material facts been pleaded to establish a  
misrepresentation occurred in British Columbia?  
b) Has the Plaintiff presented evidence to establish a  
misrepresentation occurred in British Columbia?  
[22] - [52]  
[53] - [77]  
[53] - [59]  
2. Does the proceeding concern a business carried on in British  
Columbia?  
a) Have material facts been pleaded to establish that THC carries  
on business in British Columbia?  
b) Has THC adduced evidence to rebut the pleaded facts?  
[60] - [77]  
[78] - [78]  
[79] - [79]  
IV. CONCLUSION  
V. COSTS  
Leaf v. Hershey Canada Inc.  
Page 3  
I.  
Introduction  
This matter involves a class proceeding under the Class Proceedings Act,  
[1]  
R.S.B.C. 1996, c. 50, in which the plaintiff, Scott Leaf, seeks to certify a class action  
against the defendants, Hershey Canada Inc. (“HCI”) and The Hershey Company  
(“THC”) who manufacture, market, and distribute chocolate confectionary products.  
The claim is made in respect of alleged representations that THC and HCI oppose  
the use of child labour and slavery. Mr. Leaf alleges that contrary to those  
representations, “child labour and slavery” are present in the defendants’ supply  
chain. He asserts claims against the defendants in misrepresentation at common  
law and under the Competition Act, R.S.C. 1985, c. C-34.  
[2]  
The defendants deny the allegations.  
[3]  
THC is described in the notice of civil claim (the “Claim”) as a “global  
chocolate food products company”, incorporated in Delaware with a principal place  
of business in Hershey, Pennsylvania. On this application, THC seeks an order  
dismissing or permanently staying the proceeding against it on the ground that this  
court does not have jurisdiction in respect of the claim against it.  
[4]  
HCI denies liability; it does not dispute jurisdiction. The plaintiff has  
discontinued his claim against the defendant, Hershey Chocolate & Confectionary  
Corporation.  
II.  
Legal Framework  
[5]  
The issue of this court’s territorial competence in a proceeding is determined  
by reference to Part 2 of the Court Jurisdiction and Proceedings Transfer Act, S.B.C.  
2003, c. 28 [CJPTA]: CJPTA, s. 2(2).  
[6]  
Pursuant to s. 3 of the CJPTA, British Columbia courts have territorial  
competence in a proceeding that is brought against a person in one of five  
specifically enumerated circumstances including if “there is a real and substantial  
connection between British Columbia and the facts on which the proceeding against  
that person is based”: CJPTA, s. 3(e).  
   
Leaf v. Hershey Canada Inc.  
Page 4  
[7] Section 10 of the CJPTA, in turn, sets out the circumstances in which a real  
and substantial connection exists. Without limiting the right of a plaintiff to prove  
others, that section sets out that “a real and substantial connection between British  
Columbia and those facts [on which the proceeding against that person is based] is  
presumed to existin any of twelve categories. Of those, the plaintiff relies upon the  
following:  
s. 10(g): that the proceeding concerns a tort committed in British  
Columbia; and  
s. 10(h): that the proceeding concerns a business carried on in  
British Columbia.  
[8]  
The first step in a jurisdictional challenge is for the Court to examine the  
pleadings to determine whether the pleaded facts disclose a real and substantial  
connection between the jurisdiction and the facts on which the proceeding is based.  
The basic jurisdictional facts relied on by the plaintiff as taken to be true if pleaded:  
Purple Echo Productions, Inc. v. KCTS Television, 2008 BCCA 85 at paras. 30-35  
[Purple Echo]; Ewert v. Höegh Autoliners AS, 2020 BCCA 181 at para. 15 [Ewert].  
[9]  
Where jurisdictional facts, that is, any of the facts set out in ss. 10(a) though  
10(l), have been pleaded, the presumption of a real and substantial connectionwill  
be made out. While the presumption is rebuttable, it is likely to be determinative in  
almost all cases: Stanway v. Wyeth Canada Inc., 2009 BCCA 592 at para. 22  
[Stanway], leave to appeal ref’d, S.C.C.A. No. 68.  
[10] If the pleading lacks jurisdictional facts, the plaintiff may adduce affidavit  
evidence to prove those facts. As the Court of Appeal held in Purple Echo at  
para. 34:  
[T]he nature of the inquiry does not change merely because evidence is  
adduced. The objective is to determine whether there are facts alleged, which  
if true, would found jurisdiction. The court is not charged with the task of  
determining whether the facts are true. A plaintiff need show only an arguable  
case that they can be established.  
Leaf v. Hershey Canada Inc.  
Page 5  
[11] A defendant challenging jurisdiction is entitled to contest the pleaded facts  
with evidence. In that case, too, the plaintiff is required only to show that there is a  
good arguable case that the pleaded facts can be proven. The role of the chambers  
judge is not to prematurely decide the merits of the case or to determine whether the  
pleaded facts are proven on a balance of probabilities; the plaintiff’s burden is low:  
Ewert at para. 16.  
III.  
Analysis and Discussion  
1. Does the proceeding concern a tort committed in British  
Columbia?  
a) Have material facts been pleaded to establish a  
misrepresentation occurred in British Columbia?  
[12] In the Claim, Mr. Leaf asserts claims in misrepresentation, specifically, the  
common law tort of negligent misrepresentation, against the defendants, including  
THC.  
[13] Rule 3-7(18) of the Supreme Court Civil Rules, B.C. Reg. 168/2009 provides  
that if the party relies on misrepresentation, full particulars, with dates and items if  
applicable, must be stated in the pleading. In accordance with that Rule, at  
paras. 10-13 of the Claim, the plaintiff particularizes the alleged misrepresentations  
(the “Pleaded Misrepresentations”) which are contained in three sources (collectively,  
the “Corporate Reporting”): (a) a statement on October 3, 2012, (b) “a 2014  
Corporate Social Responsibility Report”, and (c) a “Supplier Code of Conduct”.  
[14] The specific allegations are:  
10.  
The Defendants have made numerous representations that create an  
impression that they oppose child labour and slavery. On October 3, 2012,  
the Defendants stated that they supported programs to help eliminate child  
labor in the cocoa regions of West Africa.”  
11.  
In a 2014 Corporate Social Responsibility Report, the Defendants  
claimed that they were "actively involved in large-scale efforts that are  
committed to rooting out forced labor, especially forced child labor, in our  
cocoa supply chain."  
12.  
The Defendants explicitly stated in a 2014 Corporate Social  
Responsibility Report that the Defendants have zero tolerance for the worst  
     
Leaf v. Hershey Canada Inc.  
Page 6  
forms of child labor in its supply chain (as defined by International Labor  
Organization Conventions 138 and 182).”  
13.  
In their Supplier Code of Conduct, the Defendants affirm that they are  
committed to the elimination of the 'worst forms of child labor,' as defined by  
International Labor Organization (ILO) Convention 138 & 182, from its supply  
chain.The Defendants specifically claim that the following child labor  
practices are prohibited in their supply chain:  
(a) Children should not be kept from school to work on the farm.  
(b) Children should not carry heavy loads that harm their physical  
development.  
(c) Children should not be present on the farm while farm chemicals  
are applied.  
(d) Young children, generally considered to be under 14 years of  
age, should not use sharp implements.  
(e) Trafficking of children or forcing children to work are included  
among the Worst Forms of Child Labor (WFCL).  
(f) Suppliers must not utilize or benefit in any way from forced or  
compulsory labor, including any forms of slavery.  
(g) The recruitment, transportation, transfer, harboring or receipt of  
persons, by means of the threat or use of force, coercion or  
other means, for the purpose of exploiting them is prohibited.  
[Emphasis added.]  
[15] At para. 23 of the Claim, the plaintiff alleges that “the Defendants’ corporate  
reporting conveys an impression that the Defendants prohibit and discourage child  
labour and slavery in their supply chain”.  
[16] No other alleged misrepresentations or sources of misrepresentations are set  
out in the Claim.  
[17] The issue to be considered at this stage of the analysis is whether any  
jurisdictional facts have been pleaded to support a finding that misrepresentations  
occurred in British Columbia.  
[18] On this application, there is no dispute that the tort of misrepresentation  
occurs in the jurisdiction where the negligent representation is received or where the  
plaintiff acts in reliance upon the misrepresentation: Canadian Commercial Bank v.  
Leaf v. Hershey Canada Inc.  
Page 7  
Carpenter, 62 D.L.R. (4th) 734, 1989 2811 (B.C.C.A.) Cannon v. Funds for  
Canada Foundation, 2010 ONSC 4517.  
[19] While not founded in tort, the claim for misrepresentation under ss. 36 and 52  
the Competition Act also include the elements of misrepresentation and reliance.  
[20] In this case, despite setting out the alleged misrepresentations, the plaintiff  
does not plead that he received the Corporate Reporting, or any of the Pleaded  
Misrepresentations set out in the Corporate Reporting, in British Columbia (or  
anywhere) at any time. It is clear that a person cannot act in reliance upon a  
representation that the person never received.  
[21] In other words, the Claim contains no material facts to show that the plaintiff  
received or relied on the alleged misrepresentations within British Columbia. I cannot  
conclude that jurisdictional facts have been pleaded to support a finding that the  
claim of misrepresentation has any real or substantial connection to British  
Columbia.  
b) Has the Plaintiff presented evidence to establish a  
misrepresentation occurred in British Columbia?  
[22] Notwithstanding that conclusion, this court may nonetheless have jurisdiction  
if the plaintiff is able to show, by way of affidavit evidence, a “good arguable case”  
that jurisdictional facts exist: Purple Echo at para. 34.  
[23] In case, the plaintiff has filed two affidavits to do so: his own affidavit and the  
affidavit of Michael Pucci, both of whom depose to belonging to the proposed  
putative class and both of whom reside in British Columbia.  
[24] Both affiants depose that they purchased products manufactured by the  
defendants believing that the defendants did not “rely on and benefit from child  
slavery and trafficked children in their supply chains”.  
 
Leaf v. Hershey Canada Inc.  
Page 8  
[25] Mr. Leaf deposes at paragraph 5 of his affidavit:  
I saw the Defendants’ marketing and packaging available on the shelves in  
stores in British Columbia. I also recall seeing the Defendantsadvertising  
online while in the province, and on television broadcasted to my home in the  
province, for example on Global Television Network. Based on the  
representations in all these forms of advertising, marketing and packaging, I  
believed that the Defendants did not rely on and benefit from child slavery  
and trafficked children in their supply chains.  
[Added emphasis.]  
[26] Mr. Pucci similarly deposes at para. 5 of his affidavit as follows:  
Based on the Defendants' marketing and packaging available on the shelves  
of stores in and around Prince Rupert, I believed that the Defendants did not  
rely on and benefit from child slavery and trafficked children in their supply  
chains. I also recall seeing the Defendants' advertising online while in the  
province, and on television broadcasted to my home in the province, which  
may have been through one of the following networks that I receive: NBC,  
ABC, CBS, FOX, TBS and their affiliates. Based on the representations in all  
these forms of advertising, marketing and packaging, I believed that the  
Defendants did not rely on and benefit from child slavery and trafficked  
children in their supply chains.  
[Added emphasis.]  
[27] Mr. Leaf argues that the evidence contained in those paragraphs is enough  
on which to base a good arguable case to establish jurisdictional facts tying the  
alleged misrepresentations to British Columbia.  
[28] As a starting point on this analysis, it is notable that neither Mr. Leaf nor  
Mr. Pucci depose that they received or relied on the Corporate Reporting or any of the  
Pleaded Misrepresentations. Rather, both affiants depose that they received and  
relied on the defendants’ “advertising, marketing, and packagingin British  
Columbia. Neither affiant expressly deposes that any of the Pleaded  
Misrepresentations are included in the “advertising, marketing and packaging” that  
they did receive and rely on. In other words, the evidence does nothing to rectify the  
plaintiff’s failure to plead that the Pleaded Misrepresentations were received or relied  
on in British Columbia.  
Leaf v. Hershey Canada Inc.  
Page 9  
[29] However, Mr. Leaf argues that the misrepresentation claim does not turn on  
receipt or reliance on the Corporate Reporting, or any of the Pleaded  
Misrepresentations, directly. Citing the decisions in Queen v. Cognos, [1993] 1  
S.C.R. 87 at 131 and Theratechnologies Inc. v. 121851 Canada Inc., 2015 SCC 18,  
at para. 27, he argues that misrepresentations can be implied or, alternatively, made  
by omission. He argues that the misrepresentations in this case were made in those  
ways.  
[30] The “implied” misrepresentation claim is set at out para. 34 of the Claim as  
follows:  
34.  
Through . . . [the Pleaded Misrepresentations], the Defendants  
represented to Canadian consumers that the Defendants’ products are not  
produced through child labour and/or slavery. This representation was untrue,  
deceptive and misleading.  
[Added emphasis.]  
[31] In submissions, counsel for Mr. Leaf explained the claim as follows: that the  
“advertising, marketing and packaging” he received directly contained the message  
that was created “through” the explicit misrepresentations pleaded in the Claim.  
[32] The claim of representation by omission is set out at para. 35 of the Claim as  
follows:  
The Defendants’ omission of any information [in its marketing, advertising,  
and packaging] regarding its use of child labour and slavery was a material  
misrepresentation.  
[33] THC submits that even with those pleadings and evidence, Mr. Leaf has still  
failed to establish the jurisdiction facts required to establish a connection to British  
Columbia. It emphasizes that the representations that comprise the factual basis of  
the claim are the Pleaded Misrepresentations that are set out in the Claim. On that  
basis, it argues that the jurisdictional challenge places upon the plaintiff an onus to  
adduce evidence that he received or relied on, in British Columbia, the Pleaded  
Misrepresentations; not the unidentified representations contained in “marketing,  
advertising, and packaging” referred to in the affidavit evidence but not in the Claim.  
Leaf v. Hershey Canada Inc.  
Page 10  
[34] Without intending to unduly simplify the comprehensive submissions of  
counsel, THC argues that the affiants’ failure to adduce evidence of receipt of or  
reliance on the expressly Pleaded Misrepresentations is also fatal to its argument of  
impliedmisrepresentation (set out in para. 34 of the Claim) or misrepresentation by  
omission (set out in para. 35 of the Claim). Regarding the implied misrepresentation,  
THC argues that it is not clear how the plaintiff received the “message” he alleges is  
contained in the “advertising, marketing, packaging” if he did not see, read, or hear  
the explicit Pleaded Misrepresentations through which message was allegedly  
created.  
[35] In response to THC’s argument regarding the claim for misrepresentation by  
omission, THC refers to the decision in Arora v. Whirlpool Canada LP, 2013  
ONCA 657 for the proposition that an omission is not actionable as a  
misrepresentation unless the defendant is obliged to disclose the omitted facts. It  
argues that no such duty exists in this case.  
[36] THC argues that Queen v. Cognos, the decision on which the plaintiff relies,  
stands for the proposition that an omission is an actionable as a misrepresentation only  
if a plaintiff first receives an express representation that would lead to an inescapable  
inference. The express representation, it argues, is what give rise to the defendant’s  
obligation to disclose omitted information. No claim for misrepresentation by  
omission can be made without the express representation. As neither Mr. Leaf nor  
Mr. Pucci depose to having received express representations, in this case being the  
Pleaded Misrepresentations, THC argues that the claim for misrepresentation by  
omission must fail.  
[37] I do not accept any of those arguments as a basis on which to conclude that  
the plaintiff has failed to allege jurisdictional facts on which to ground this Court’s  
territorial competence.  
[38] First, the case authority is clear that the failure to plead jurisdictional facts will  
not be determinative on a jurisdictional challenge if affidavit evidence is adduced to  
establish such facts.  
Leaf v. Hershey Canada Inc.  
Page 11  
[39] At para. 30 of Purple Echo, the Court of Appeal quotes from the decision in  
Roth v. Interlock Services, Inc., 2004 BCCA 407, in part, as follows:  
[30]  
…Affidavit evidence of facts relevant to jurisdiction simpliciter is  
admissible when facts are not alleged in the plaintiff’s pleading because they  
are not material facts, or when they are, are not particularized in the pleading  
in sufficient detail to enable determination of the issue…  
[40] It noted, “[i]t would be a startling departure from existing jurisprudence if the  
consideration of jurisdiction were confined solely to the pleadings with no opportunity  
for a plaintiff to support jurisdiction with evidence.”: Purple Echo at para. 34.  
[41] I am satisfied that the plaintiff is not confined to the facts alleged in the Claim,  
in this case, the Pleaded Misrepresentations, to establish that jurisdictional facts  
exist on which to establish territorial competence. He is entitled to adduce affidavit to  
provide details of the claim. He has done so. I will discuss that evidence in more  
detail below.  
[42] THC’s other arguments address the alleged deficiencies in the plaintiff’s claim  
to make out the claim for misrepresentation, as alleged: firstly, the plaintiff’s failure to  
establish that he received or relied on any of the Pleaded Misrepresentations or,  
alternatively, to particularize the misrepresentations he alleges are contained in the  
“marketing, advertising, and packaging”; and secondly, the absence of the elements  
required make out the claim as alleged. The fact that the arguments address the  
misrepresentation claim is notable. The plaintiff is not obliged on this application to  
establish that a cause of action has been made out: Fairhurst v. De Beers Canada  
Inc., 2012 BCCA 257 at para. 20 [Fairhurst].  
[43] In Fairhurst, the plaintiff in a proposed class action alleged that the  
defendants, the manufacturers and distributers of diamonds, conspired to fix prices,  
resulting in the plaintiff and the proposed class members paying more for their  
diamonds.  
[44] The defendants applied for an order striking the claim. They also challenged  
the jurisdiction of the court to entertain the action. The chambers judge dismissed  
Leaf v. Hershey Canada Inc.  
Page 12  
the application, ruling that the plaintiff had pleaded the elements necessary to  
support a finding of territorial competence and that the defendants had not rebutted  
the finding. The defendants appealed.  
[45] The Court of Appeal noted that many of the defendantssubmissions on  
appeal were directed at deficiencies in the plaintiff’s pleading, as opposed to the  
issue of territorial competence. The submissions made in that case were  
summarized at para. 19 as follows:  
[19]  
… In particular, the defendants contended, Ms. Fairhurst had not  
“properly pleaded that a conspiracy ‒ or any other tort [had] occurred in  
British Columbia”; she had “failed to sufficiently describe the parties to the  
alleged conspiracy and their relationship as amongst each other”; she had  
failed to “identify any unlawful act or acts engaged in by the Defendants”; she  
had failed to show that “any alleged wrongful act was directed at her or others  
in British Columbia”; and it was “implausible” to assert a conspiracy by any of  
the defendants with persons who are their customers. Finally, it was said, the  
plaintiff had “made no allegation and adduced no facts that would make such  
an alleged conspiracy credible.”  
[46] At para. 20, the Court of Appeal rejected those arguments as being outside  
the scope of the application challenging jurisdiction. It stated:  
[20]  
With respect, many of these arguments assume incorrectly that the  
chambers judge was required to determine on this application whether a  
cause of action was made out. The only application before her related to  
territorial jurisdiction. . . . In the present application, it was not open to the  
court below, nor is it open to this court, to make findings of fact on disputed  
evidence. As this court stated in Purple Echo Productions, supra:  
... the nature of the inquiry does not change merely because  
evidence is adduced. The objective is to determine whether  
there are facts alleged, which if true, would found jurisdiction.  
The court is not charged with the task of determining whether  
the facts are true. A plaintiff need show only an arguable case  
that they can be established. [At para. 34.]  
[21]  
Nor is it our task to weigh the ‘implausibility’ of the claim as pleaded.  
Thus the defendants’ objection that:  
To allow the Plaintiff to benefit from the statutory presumption  
in circumstances where the Claim asserts nothing more than a  
bald allegation of conspiracy, is bereft of jurisdictional facts  
regarding the alleged involvement of each of the Defendants,  
and makes assertions on behalf of a class of indirect  
purchasers essentially renders foreign defendants subject to  
legal proceedings in British Columbia based on nothing more  
Leaf v. Hershey Canada Inc.  
than legal drafting claiming an implausible and legally  
Page 13  
untenable allegation of injury arising in British Columbia and  
an indiscriminate “scatter gun” approach to naming  
defendants.  
misconceives the role of the court under s. 10 of the CJPTA. As Stanway  
makes clear, if the “facts on which the proceeding ... was based” come within  
any of the sub-paras. of s. 10, a real and substantial connection between  
British Columbia and those “facts” is presumed to exist.  
[Added emphasis.]  
[47] Like the defendants in Fairhurst, in my view, THC’s submissions on this  
application also are directed at deficiencies in the plaintiff’s pleadings and what it  
says should preclude the plaintiff from succeeding on a claim for misrepresentation.  
[48] THC’s submissions boil down to its argument that the plaintiff has failed to  
establish that he received or relied on any of the Pleaded Misrepresentations that  
are particularized in the Claim. Alternatively, it argues that the plaintiff has failed to  
particularize the alleged misrepresentations contained in the “advertising, marketing,  
or packaging” which Mr. Leaf and Mr. Pucci received and on which they relied. Both  
arguments go to deficiencies in the pleading. By THC’s argument, those  
deficiencies, in turn, dictate that the plaintiff is unable to establish the elements  
required to ground a claim for misrepresentation on the basis set out in the Claim.  
[49] Without deciding the issues raised, there may be merit to THC’s arguments.  
Indeed, the plaintiff’s claim for misrepresentation may fail for any or all of the  
reasons argued by THC. As contemplated in Fairhurst, the claim may even be  
“implausible”. However, those arguments go to the issue of whether the plaintiff has  
properly made out the claim for misrepresentation. That is not the issue to be  
determined on this application. In my view, THC’s arguments do not address the  
issue of whether the plaintiff has established jurisdictional facts to support a finding  
that there is a real and substantial connection to the province, that being the sole  
issue to be determined.  
[50] In this case, jurisdictional facts are raised in Mr. Leaf’s and Mr. Pucci’s  
affidavit evidence. Both affiants depose that the defendants, including THC, made  
Leaf v. Hershey Canada Inc.  
Page 14  
representations in their advertising, marketing, packaging. They also depose that  
they received and relied on those representations, alleged to be misrepresentations,  
in British Columbia. That evidence of receipt and reliance on an alleged  
misrepresentation in British Columbia are the jurisdictional facts that are required to  
establish a real and substantial connection to British Columbia.  
[51] THC did not challenge those facts. The deposed jurisdictional facts, which I  
take to be true, are sufficient to establish a real and substantial connection to British  
Columbia. It follows that territorial competence has been proven.  
[52] Having reached that conclusion, I do not have to consider whether the plaintiff  
has established that the proceeding against THC concerns a business carried on in  
British Columbia. However, for the sake of completeness, I have set out my analysis  
of that issue below.  
2.  
Does the proceeding concern a business carried on in British  
Columbia?  
a) Have material facts been pleaded to establish that  
THC carries on business in British Columbia?  
[53] At first blush, as THC argues, there is no express plea contained in the Claim  
that THC carries on business in British Columbia. However, that is not to say that  
there is no reference to THC carrying on business in British Columbia at all.  
[54] Throughout the Claim, the plaintiff does not distinguish between any of the  
defendants, referring not to any individual defendant, but referring to the  
Defendantscollectively in the plural. In that way, he attributes the conduct of one to  
the conduct of all.  
[55] The same is true with respect to the pleading setting out the place where the  
defendants’ products are sold. At para. 5 of the Claim, the plaintiff asserts:  
Mr. Leaf has purchased products manufactured and marketed by the  
Defendants at retail stores within British Columbia.  
   
Leaf v. Hershey Canada Inc.  
Page 15  
[56] No other facts are pled with respect to the conduct of THC’s business in any  
location.  
[57] In Stanway, the plea that the defendants “jointly ‘marketed, tested,  
manufactured, labelled, promoted, sold, and otherwise placed’… products into the  
stream of commerce in British Columbiawas held to be in effect a plea that the  
defendants, including the US defendants who challenged jurisdiction, carried on  
business in British Columbia. That plea was sufficient to satisfy s. 10(h) of the  
CJPTA and the presumption of territorial competence was raised: Stanway at  
para. 63.  
[58] Like the plea in Stanway, para. 5 of the Claim in this case also refers to the  
defendants in the plural, denoting that all of the defendants, including THC,  
manufactured and marketed products that were sold and purchased in British  
Columbia. While there is no express plea that the defendants did so “jointly” or that  
the defendants conducted a joint enterprise, I am satisfied that the collective  
reference to all of the defendants is a sufficient plea that THC manufactured and  
marketed products that were purchased in British Columbia.  
[59] In the circumstances, I accept that the jurisdictional facts contemplated by  
s. 10(h) of the CJPTA, that TCH carries on business in British Columbia, have been  
pleaded. That being the case, the question is whether THC has rebutted those  
pleaded facts.  
b) Has THC adduced evidence to rebut the pleaded  
facts?  
[60] In order to rebut the presumption that it carries on business in British  
Columbia, THC has adduced the affidavits of Kathleen Friesen, Charles Chappell  
and Andrew Mushing, all of whom are senior employees of either THC or HCI. THC  
argues that, collectively, their affidavits show that TCH does not manufacture  
Hershey products in Canada and is not responsible for advertising or distributing  
Hershey products anywhere in Canada. It argues that evidence rebuts any  
 
Leaf v. Hershey Canada Inc.  
Page 16  
presumption that THC carries on business in British Columbia as alleged in the  
Claim.  
[61] Collectively, the affidavit evidence includes the following:  
a) Since 2015, and as early as 2010, THC has not manufactured,  
sold or distributed any Hershey chocolate products anywhere in  
Canada;  
b) HCI is the only company among THC and its affiliates that  
manufactures, sells and distributes Hershey chocolate  
confectionary products within Canada;  
c) THC does not actively promote the sale of Hershey chocolate  
products within British Columbia through advertising;  
d) All advertising purchases made by THC are directed to the  
United States marketplace. THC does not purchase advertising  
space directed to the Canadian marketplace through any  
advertising channel;  
e) All decisions relating to Canadian advertising for any Hershey  
chocolate confectionary products are made independently by  
HCI and not by THC; and  
f) Among THC and its affiliates, HCI is the only company  
responsible for the sale, marketing, merchandising, promotion  
and advertising of Hershey chocolate confectionary products  
within Canada.  
[62] On its face, that evidence does appear to rebut the plea that THC either  
manufactured or marketed products sold in British Columbia as alleged in the Claim.  
However, as the plaintiff argues, the evidence is more notable for what it does not  
say, than for what it does say. Mr. Leaf argues that when the former is considered,  
the evidence is not sufficient to rebut the presumption in its favour.  
Leaf v. Hershey Canada Inc.  
Page 17  
[63] Regarding manufacturing, Ms. Friesen deposes that “THC does not  
manufacture, sell or distribute any Hershey chocolate confectionary products  
anywhere in Canada”. Her evidence is that HCI is the only company that  
manufactures, sells and distributes those products within Canada.  
[64] However, the evidence does not preclude the possibility that chocolate  
manufactured by THC outside of Canada is available for distribution or sale in in  
British Columbia, either by HCI or otherwise. To unequivocally rebut that possibility,  
THC could have adduced evidence that stated, “No products manufactured by THC  
are available for distribution or sale in Canada”. It did not.  
[65] The plaintiff makes a similar argument with respect to advertising.  
Mr. Chappell deposes that HCI, not THC, makes all decisions relating to Canadian  
advertising for Hershey chocolate confectionary products. He also deposes that all  
advertising purchases made by THC are directed to the United States’ marketplace.  
[66] However, nothing in the evidence precludes the possibility that THC creates  
or produces the advertising that is purchased and distributed by HCI in Canada. In  
fact, Mr. Chappell deposes only that THC does not “actively” promote the sale of  
Hershey chocolate through advertising, leaving open the possibility of some  
involvement. He does not expand on what possible indirect promotion it may  
conduct in Canada. As is the case with manufacturing, it was open to THC to  
adduce direct evidence that no advertising created or produced by THC is directed  
to or distributed in Canada, by HCI or otherwise. Again, it did not. The possibility  
that advertising created by THC is distributed in British Columbia remains open.  
[67] When the manner in which THC framed the conduct of its business in Canada  
is considered, it cannot be said with certainty that products manufactured by THC  
are not available for sale in British Columbia nor can it be said that no advertising  
created or produced by THC is available for viewing in Canada. It is at least  
arguable.  
Leaf v. Hershey Canada Inc.  
Page 18  
[68] That conclusion is supported by the relationship between THC and HCI,  
which, as the plaintiff argues, supports an inference that they conduct business as a  
“joint enterprise”.  
[69] Ms. Friesen describes HCI as an “affiliate” of THC, and that “THC is the  
ultimate parent company of HCI”. David Dunlop, corporate counsel for HCI, more  
specifically deposes that the shares of HCI are owned by a Netherlands corporation,  
but confirms that the “ultimate parent company of HCI and [the Netherlands  
corporation] is [THC]”. However, in both its filings with the Securities Exchange  
Commission and in an unsworn document that appears to have been prepared by  
THC for its shareholders, THC describes HCI as a “wholly owned subsidiary”.  
[70] I accept that THC’s ownership of HCI, a company that does not deny the  
jurisdiction of this court, is not enough to satisfy the test for establishing that THC  
carries on business in British Columbia: CIC Capital v. Rawlinson, 2016 BCSC 516  
at para. 38.  
[71] However, the plaintiff does not base its argument that THC conducts business  
in joint concert with THC on the sole fact of that direct or indirect ownership. Among  
others, the following factors are notable:  
a) In 2012, HCI acquired the shares of a company that  
manufactured chocolate in British Columbia, after which THC  
manufactured chocolate in British Columbia until 2016. Pursuant  
to its terms, notices under the share purchase agreement were  
to be sent to THC. That notice provision is some indication of  
THC’s interest in, or perhaps even oversight of, HCI’s  
manufacture of chocolate in British Columbia;  
b) That HCI is included in THC’s consolidated financial statements  
suggests that they share financial interests; and  
c) HCI does not operate its own website. Rather, it appears to rely  
on online promotional materials operated by THC, which  
Leaf v. Hershey Canada Inc.  
Page 19  
suggests that THC does have a say in the promotion and  
advertising conducted by HCI in British Columbia.  
[72] None of those factors prove on a balance of probabilities that THC operates a  
joint enterprise with HCI in British Columbia (or otherwise). However, that is not the  
burden imposed on the plaintiff at this stage of the analysis. I am satisfied that,  
when considered with how THC framed its and HCI’s conduct of business in in  
Canada, these factors are enough to establish a good arguable case that THC and  
HCI operate in joint concert and, furthermore, that they do so in respect of at least  
one of the manufacture, marketing, or sale of chocolate products in British Columbia.  
[73] It is also significant that the plaintiff has not conducted any discoveries and as  
such, does not have any specific knowledge or the corporate or business  
arrangements between THC and HCI.  
[74] In Fairhurst, the Court of Appeal considered the difficulties that a plaintiff  
faces in pleadings in light of defendants’ “complex corporate arrangements”, in that  
case to prove the particulars of a conspiracy. At paras. 33 and 34, it said:  
[33]  
As for the defendants’ argument in Vitapharm that the plaintiffs had  
not sufficiently particularized the role of each defendant in the alleged  
conspiracies, the Court observed that by their nature, conspiracies and  
conspirators are secretive and that it was “far too early to put the plaintiffs to  
the task of unravelling the apparently complex corporate arrangements and of  
proving their case against specific entities”, citing Nutreco Canada Inc. v.  
Hoffmann, 2001 BCSC 1146.  
[34]  
In my view, it is also too early in this case to put the plaintiff to the task  
of “unravelling” the defendants’ respective roles, if any, in the alleged  
conspiracy. I would not accede to the defendants’ objections regarding the  
pleadings generally.  
[Added emphasis.]  
[75] Although that decision and that passage, in particular, were made in respect  
of proving a conspiracy, in my view, it is equally applicable to the circumstances of  
this application in which the plaintiff is attempting to unravel the potentially complex  
corporate arrangements that could show the extent to which THC, a multinational  
company, may carry on business in British Columbia.  
Leaf v. Hershey Canada Inc.  
Page 20  
[76] On the evidence before me, I am satisfied that the plaintiff has met the low  
burden imposed on it to show a good arguable case that THC and HCI operate in  
joint enterprise in respect of manufacturing, marketing, and sale of Hershey products  
in British Columbia as alleged in the Claim. That being the case, I am satisfied that  
for the purposes of this application, THC carries on business on British Columbia.  
[77] The plaintiff has established a real and substantial connection with British  
Columbia under s. 10(h) of the CJPTA. It follows that that he has met the test for  
territorial competence required by s. 3(e).  
IV.  
Conclusion  
[78] For the reasons set out above, I am satisfied that the plaintiff has shown a  
good arguable case that a real and substantial connection exists between British  
Columbia and the facts on which the action is based on the bases of ss. 10(g) and  
10(h) of the CJPTA. Accordingly, pursuant to ss. 3(e) of the CJPTA, this court has  
territorial competence to determine the claim against THC.  
V.  
Costs  
[79] The plaintiff has succeeded on this application. It is entitled to costs against  
THC on Scale B.  
Ahmad, J.”  
   


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