Mohammed Elshafie

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 applicants sought declarations that their removal as directors of the Niagara Regional Native Centre (NRNC) and the subsequent election of the individual respondents to the board in February 2023 were invalid due to governance irregularities and violations of the Not-for-Profit Corporations Act and NRNC By-Laws.

The court found the February 2023 election and the applicants' removal and membership termination invalid due to lack of proper notice, voting irregularities, and failure to comply with statutory and by-law requirements.

While acknowledging the invalidity, the court declined to reinstate the applicants or invalidate all acts of the subsequent board, instead ordering the current October 2023 board to continue until a properly conducted election, with specific protocols for membership and voting.

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.