Alycia Young

The Court of Appeal for Ontario dismissed an appeal by S.D.M.O. Industries (Kohler-SDMO) and Kohler Co., who sought to stay proceedings on the basis of lack of jurisdiction or a forum selection clause favoring a French court.

The court held that Ontario had jurisdiction, the forum selection clause was not proven to be valid or applicable, and the motion judge made no reviewable error.

The appeal was dismissed with costs.

The plaintiffs brought an action for damages arising from catastrophic failures of emergency generators at a hospital.

Defendants SDMO and Kohler moved to stay proceedings, arguing lack of jurisdiction or that Ontario was not an appropriate forum.

The court found Ontario had jurisdiction simpliciter as the torts (property damage, failure to warn, negligent misrepresentation) occurred in the province.

The court also found the forum selection clause in the contract between SDMO and GAL Power was not properly before the court and would not apply to third parties or be enforceable against GAL Power.

Finally, the court determined Ontario was the most appropriate forum, considering the location of parties, witnesses, and evidence, and the existence of related proceedings.

The motion for a stay was dismissed.

The moving party Plaintiffs ("AFEX") sought a continuation of an ex parte Mareva injunction against the Defendants (MBM Trading, Mendel Streicher, and Emmeco Inc.).

AFEX's claim arose from six USD wire transactions totaling over $845,000 that were initiated by MBM but subsequently rejected by MBM's financial institutions due to insufficient funds or frozen accounts.

The court found a strong prima facie case of fraud, inferring that Streicher knew or was wilfully blind to the frozen status of his accounts when initiating the transactions.

The court rejected the Defendants' arguments regarding jurisdiction and the absence of a signed account agreement, finding that the parties' conduct implied an agreement to Ontario jurisdiction and that a mediation clause did not preclude urgent interlocutory relief.

The court also found a serious risk of asset dissipation, noting Streicher's lack of transparency regarding the use of AFEX funds and his rapid repayment of other creditors.

The Mareva injunction was continued, and the MBM Defendants were ordered to provide a sworn statement of worldwide assets and submit to examinations.

The applicant sought entitlement to stock options, arguing constructive dismissal from employment after one year when their role transitioned to a consulting position.

The respondent contended that the transition to a consulting role and subsequent departure were by mutual agreement, thus precluding option entitlement.

The court found no constructive dismissal, determining that the change in role was mutually agreed upon and contemplated by the original employment contract.

The applicant's subsequent departure after the consulting term was also deemed voluntary.

Consequently, the application for stock options was dismissed.