COURT FILE NO.: CV-16-556405 DATE: 20170503

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

TFS RT INC. and TFP INTERNATIONAL INC. Plaintiff – and – KENNETH DYCK, SHAUN DYCK and GPEC HOLDINGS LTD. Defendants

Counsel: Mark S. Shapiro and Michael J. Brzezinski, for the Plaintiffs Caleb J. Edwards, for the Defendants

HEARD: March 21, 2017

M.D. FAIETA j.

REASONS FOR DECISION

INTRODUCTION

[1] The plaintiffs bring this action against the defendants for payment of $924,344.55 pursuant to written guarantees that the defendants gave in respect of the obligations of Green Patch Environmental Consulting Ltd. (“GPEC”).

[2] The defendants bring this motion pursuant to s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C. 43, and Rules 17.06 and 21.01(3)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for (1) an order to stay this action on the grounds that Ontario lacks jurisdiction simpliciter over the proceeding; or (2) in the alternative, an order staying the within action on the grounds that Ontario is forum non conveniens.

[3] For the reasons described below, I have dismissed the defendants’ motion.

BACKGROUND

[4] The plaintiffs, TFS RT Inc. (“TFS”) and TFP International Inc. (“TFP”), are providers of short-term financing, specializing in accounts receivable factoring arrangements. TFS is incorporated pursuant to the laws of Ontario. TFP is incorporated pursuant to the laws of the State of Florida. Both TFS and TFP have offices in Ontario.

[5] GPEC is incorporated pursuant to the laws of Alberta. Its head office is in Edmonton. GPEC supplies products, technologies and other services to the mining, energy and construction sectors in Alberta. Its principal assets are its accounts receivable and product inventory.

[6] Kenneth Dyck (“Kenneth”) and his son Shaun Dyck (“Shaun”) are the only officers, directors and shareholders of GPEC. GPEC’s operations were funded through a loan provided by the Bank of Nova Scotia (“BNS”).

[7] On June 8, 2015, BNS demanded that GPEC repay its loan in full by August 14, 2015.

[8] Kenneth contacted Louis Fradette (“Fradette”), a loan broker with Alberta Business Loans Inc., to assist GPEC in obtaining financing to repay BNS and to continue GPEC’s operations.

[9] With Fradette’s assistance, GPEC received and accepted a funding commitment from the Alberta Treasury Branches on June 17, 2015. This commitment was withdrawn in July 2015.

[10] Fradette then approached the plaintiffs (collectively referred to as “TF”). On July 8, 2015, Anne MacRae (“MacRae”), then Vice-President of Business Development with TF, located in Toronto, sent an email to Fradette with an application form and personal financial statement to be completed for GPEC. MacRae’s role was to conduct initial screening, negotiate the terms of the deal, ensure the loan application and personal financial statement were completed, and serve as a point of contact for the borrower, GPEC, and, at times, GPEC’s lawyers, Miller Thomson LLP.

[11] MacRae sent Kenneth a letter dated August 12, 2015. The letter outlined the terms of the credit facility that TFS RT Inc. was prepared to provide to GPEC. Among other things, it required the delivery of personal guarantees. Kenneth signed the term sheet and returned it to MacRae on August 13, 2015.

[12] Zachary Spencer (“Spencer”) was the lead underwriter for TF on the loan transaction in question. He is located in Toronto. He became involved in this financing once the initial screening was completed. Kenneth and Spencer communicated by email on many occasions between August 7, 2015 and August 24, 2015 for the purpose of exchanging information and documents in order to obtain the financing. Kenneth states that GPEC was under enormous financial pressure as the BNS deadline passed. GPEC’s lawyers delivered supporting information and documents to MacRae and Spencer by emails dated August 24, 2015.

[13] Kenneth states that Fradette provided him with the loan documentation in late August 2015. These documents included a Master Accounts Receivable Loan and Security Agreement (“Loan”) and personal guarantees from Kenneth and Shaun, as well as a guarantee from GPEC Holdings Ltd. (“Holdco”) in favour of TF (the “Guarantees”). Holdco owns many of the assets used in GPEC’s business. Kenneth states that Fradette told him that if he wanted the financing, he had to complete and return these standard documents.

[14] The draft Loan and Guarantees were sent by Spencer to Kenneth and Shaun by email dated August 24, 2015 at 6:47 p.m. Spencer’s email states:

Ken,

Please find attached copies of our security documents. Please review and execute at your convenience.

Thanks,

Zach Spencer

[15] Kenneth returned the signed documents to Spencer and MacRae about 24 hours later by email dated August 25, 2015 at 4:58 p.m. Kenneth’s email states:

Hi Anne, Zach,

Have included all the agreements all signed and witnessed. Will have bank account opened tomorrow after we receive Sandra’s signature. What next?

Ken Dyck

[16] The Loan is dated August 12, 2015. It was structured as a receivable financing arrangement with advances tied to GPEC’s outstanding eligible accounts receivable.

[17] The Guarantees are dated August 24, 2015. They provide that the indebtedness, obligations and liabilities of GPEC under the Loan are personally guaranteed by Kenneth, Shaun and Holdco.

[18] Each of the Guarantees contains a choice of law clause and a forum selection clause (“Jurisdiction Clause”). Each Jurisdiction Clause states:

Governing Law and Submission to Jurisdiction. This Guarantee shall be governed by and construed in accordance with the laws of the province of Ontario and the laws of Canada applicable therein and the Guarantor hereby accepts and irrevocably submits to the jurisdiction of the courts of the province of Ontario and acknowledges their competence and agrees to be bound by any judgment thereof except that nothing herein shall limit the Lender’s right to bring proceedings against the Guarantor elsewhere. [Bold in original. Underlining added.]

[19] The first advance of about $1.6 million was made by TFS to GPEC on September 3, 2015. Several more advances were made by the end of 2015.

[20] The loan matured on December 31, 2015 without full repayment by GPEC.

[21] TF entered into a Forbearance Agreement, dated March 17, 2016, with GPEC, Kenneth, Shaun and Holdco. TF agreed to forbear from acting upon its rights and remedies under the Loan and the Guarantees until April 30, 2016 to permit GPEC an opportunity to repay the Loan.

[22] On March 7, 2016, TF demanded payment from the defendants pursuant to the Guarantees.

[23] On May 2, 2016, the period of forbearance under the Forbearance Agreement was extended to May 14, 2016.

[24] Paragraph 4(h) of the original Forbearance Agreement, which was signed by the defendants, states:

Each of the Borrower and Guarantors hereby acknowledge and agree to and in favour of the Secured Parties [TF] as follows…

The Guarantees are valid and binding Obligation of the Guarantors to the Secured Parties enforceable in accordance with the respective terms…

[25] Upon the expiry of the amended forbearance period, TF arranged for the appointment of MNP Ltd., with GPEC’s consent, as receiver of all of GPEC’s assets, undertakings, and property, pursuant to an order of this court dated June 7, 2016.

[26] The receivership is ongoing as of the date of this motion.

[27] This action was commenced on July 11, 2016. TF alleges that as of June 17, 2016, TFS and TFP had suffered a shortfall under the Loan in the amount of $924,344.55.

[28] The defendants submit that they were induced to sign the Guarantees in circumstances that violated Alberta law. First, the choice of law and exclusive jurisdiction provisions in favour of Ontario were not brought to Kenneth or Shaun’s attention before they signed the Loan and Guarantees. Second, they did not sign the Guarantees before a lawyer and, as a result, under the laws of Alberta, the Guarantee is unenforceable. They submit that Ontario does not have jurisdiction simpliciter or, in the alternative, that Alberta is the most appropriate forum for the dispute to be resolved.

ANALYSIS

[29] The Supreme Court of Canada’s decision in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572 governs whether a court in Ontario is entitled to assume jurisdiction over a foreign defendant. The two main issues in making this determination are as follows:

1. Does the court in Ontario have jurisdiction simpliciter over the defendant? (a) Do any one of the four following presumptive connecting factors between the subject matter of the litigation and the Ontario forum exist?

   • Is the defendant domiciled or resident in Ontario?
   • Does the defendant carry on business in Ontario?
   • Was a tort committed in Ontario?
   • Was a contract connected with the dispute made in Ontario? (b) If a presumptive connecting factor exists, then have the defendants rebutted the presumption by showing that the presumptive connecting factor points only to a weak relationship between the subject matter of the litigation and the presumptive forum?

2. If a court in Ontario has jurisdiction simpliciter over the defendants, then should the court nevertheless exercise its discretion under s. 106 of the Courts of Justice Act to stay the action “on such terms as are considered just” if it determines that another jurisdiction is a more appropriate forum for this action?

ISSUE #1: DOES THIS COURT HAVE JURISDICTION SIMPLICITER OVER THE DEFENDANTS?

Is there a Presumptive Connecting Factor?

[30] The general rule of contract law is that a contract is made in the jurisdiction where the offeror receives notification of the offeree’s acceptance: Eastern Power Ltd. v. Azienda Communale Energia and Ambiente (1999), 125 O.A.C. 54, at para. 22 (C.A.), appeal dismissed, [1999] S.C.C.A. No. 542. This principle applies when acceptance is delivered by email. In such cases, the contract is made in the jurisdiction where the email communicating acceptance was received: Inukshuk Wireless Partnership v. 4253311 Canada Inc., 2013 ONSC 5631, 117 O.R. (3d) 206, at paras. 25-29.

[31] The Loan and the Guarantees were signed by the defendants in Alberta. There is no dispute that Kenneth sent these agreements by email, on August 25, 2015, to Spencer and MacRae and that this email was received by them in Ontario.

[32] The defendants submit that the Loan was made in Alberta because the defendants signed the agreement in Alberta, but TF never signed the document. However, in this action, the plaintiffs are not seeking to enforce the Loan. In my view, the defendants’ submission regarding the Loan does not alter my conclusion that the Guarantees were made in Ontario.

Have the Defendants Rebutted the Presumption?

[33] In Van Breda, at paras. 95-98, the Supreme Court of Canada stated that:

The burden of rebutting the presumption of jurisdiction rests, of course, on the party challenging the assumption of jurisdiction. That party must establish facts which demonstrate that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them.

Some examples drawn from the list of presumptive connecting factors applicable in tort matters can assist in illustrating how the presumption of jurisdiction can be rebutted. For instance, where the presumptive connecting factor is a contract made in the province, the presumption can be rebutted by showing that the contract has little or nothing to do with the subject matter of the litigation. And where the presumptive connecting factor is the fact that the defendant is carrying on business in the province, the presumption can be rebutted by showing that the subject matter of the litigation is unrelated to the defendant’s business activities in the province.…

In each of the above examples, it is arguable that the presumptive connecting factor points to a weak relationship between the forum and the subject matter of the litigation and that it would accordingly not be reasonable to expect that the defendant would be called to answer proceedings in that jurisdiction. In such circumstances, the real and substantial connection test would not be satisfied and the court would lack jurisdiction to hear the dispute.

However, where the party resisting jurisdiction has failed to rebut the presumption that results from a presumptive connecting factor – listed or new – the court must acknowledge that it has jurisdiction and hold that the action is properly before it. At this point, it does not exercise its discretion to determine whether it has jurisdiction, but only to decide whether to decline to exercise its jurisdiction should forum non conveniens be raised by one of the parties. [Emphasis added.]

[34] The defendants submit:

• The dealings between the plaintiffs and GPEC occurred in Alberta.
• The defendants are residents of Alberta. They sought and obtained a loan in Alberta.
• The loan documents were signed in Alberta by the defendants and were not signed by the plaintiffs.
• The defendants did not reach out to anyone in Ontario.
• GPEC concluded the loan agreement in Alberta with a Florida company through an Alberta loan broker.
• The funds were deposited into Alberta bank accounts.

[35] TF submits that the following facts point to a real and substantial connection to the Province of Ontario:

• TFS is the entity that advanced funds to GPEC under the Loan. TFS is a corporation established under the laws of Ontario. Its head office is in Toronto.
• The Loan and Guarantees were made in Ontario. Spencer and MacRae were present in Ontario when negotiating the terms of the Loan and when they received Kenneth’s email attaching the executed Guarantees.
• The Forbearance Agreement is governed by Ontario law.
• GPEC consented to the appointment of a receiver by Order of the Ontario Superior Court of Justice. GPEC has participated in this Commercial List proceeding.
• All of the plaintiffs’ potential witnesses reside in or have a regular presence in Ontario, while the only potential witnesses in Alberta appear to be Kenneth, Shaun, and Fradette.

[36] In the circumstances described above, it is my view that the defendants have not demonstrated that there is a weak relationship between Ontario and the subject matter of the litigation.

[37] Accordingly, this court is entitled to assume jurisdiction over this action. Whether this court should decline its jurisdiction is addressed in the next section.

ISSUE #2: IS ALBERTA A MORE APPROPRIATE FORUM FOR THIS ACTION?

[38] The applicable general principles in determining the forum conveniens of a contractual dispute were described by the Ontario Court of Appeal in Young v. Tyco International of Canada Ltd., 2008 ONCA 709, 92 O.R. (3d) 161, at paras. 26-27:

Decisions on forum non conveniens motions are exercises of judicial discretion. Typically, in exercising their discretion, motion judges consider a list of factors now well established in the case law. These factors are used to assess the connections to each forum. They include:

1. The location where the contract in dispute was signed;
2. The applicable law of the contract;
3. The location of witnesses, especially key witnesses;
4. The location where the bulk of the evidence will come from;
5. The jurisdiction in which the factual matters arose;
6. The residence or place of business of the parties; and
7. The loss of a legitimate juridical advantage….

The factors listed above are not exhaustive, although in practice they are the ones typically considered. All of the factors may not be relevant in a given case. Moreover, the exercise is not mathematical. Motion judges assign each factor the weight they consider appropriate to the case. Their overall balancing of these factors reflects the discretionary nature of the decision.

[39] However, a different analysis applies when a contract contains a forum selection clause. In Novatrax International Inc. v. Hägele Landtechnik GmbH, 2016 ONCA 771, 132 O.R. (3d) 481, at para. 5, the Ontario Court of Appeal stated:

The parties agree that the motion judge correctly identified the governing principles as those set out by the Supreme Court of Canada in Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, and by this court in Expedition Helicopters Inc. v. Honeywell Inc., 2010 ONCA 351, 100 O.R. (3d) 241, leave to appeal refused, [2010] S.C.C.A. No. 258, [2010] 3 S.C.R. v (note), and 2249659 Ontario Ltd. v. Sparkasse Siegen, 2013 ONCA 354, 115 O.R. (3d) 241:

(i) The law favours the enforcement of forum selection clauses in commercial contracts. Where the parties have agreed to a forum selection clause, the starting point of the forum non conveniens analysis is that the parties should be held to their bargain; (ii) A stay of an action should be granted unless the plaintiff shows “strong cause” that the case is exceptional and the forum selection clause should not be enforced; (iii) The requirement that the plaintiff show “strong cause” presumes that there is an agreement containing a clear forum selection clause and that clause, by its terms, applies to the claims the plaintiff seeks to bring in Ontario; and (iv) The forum selection clause pervades the forum non conveniens analysis and must be given full weight in the consideration of other factors.

[40] A court will not enforce a forum selection clause where there are “sufficiently strong reasons” to find that it would not be reasonable or just in the circumstances to require adherence to the forum selection clause: Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, at para. 39.

[41] In Z.I. Pompey, at paras. 20-21 and 31, the Supreme Court of Canada stated:

Forum selection clauses are common components of international commercial transactions, and are particularly common in bills of lading.… These clauses are generally to be encouraged by the courts as they create certainty and security in transaction, derivatives of order and fairness, which are critical components of private international law.… The “strong cause” test remains relevant and effective and no social, moral or economic changes justify the departure advanced by the Court of Appeal. In the context of international commerce, order and fairness have been achieved at least in part by application of the “strong cause” test. This test rightly imposes the burden on the plaintiff to satisfy the court that there is good reason it should not be bound by the forum selection clause. It is essential that courts give full weight to the desirability of holding contracting parties to their agreements. There is no reason to consider forum selection clauses to be non-responsibility clauses in disguise. In any event, the “strong cause” test provides sufficient leeway for judges to take improper motives into consideration in relevant cases and prevent defendants from relying on forum selection clauses to gain an unfair procedural advantage.

There is a similarity between the factors which are to be taken into account when considering an application for a stay based on a forum selection clause and those factors which are weighed by a court considering whether to stay proceedings in “ordinary” cases applying the forum non conveniens doctrine…. In the latter inquiry, the burden is normally on the defendant to show why a stay should be granted, but the presence of a forum selection clause in the former is, in my view, sufficiently important to warrant a different test, one where the starting point is that parties should be held to their bargain, and where the plaintiff has the burden of showing why a stay should not be granted. I am not convinced that a unified approach to forum non conveniens, where a choice of jurisdiction clause constitutes but one factor to be considered, is preferable ....

In my view, a separate approach to applications for a stay of proceedings involving forum selection clauses in bills of lading ensures that these considerations are properly taken into account and that the parties’ agreement is given effect in all but exceptional circumstances.…

Issues respecting an alleged fundamental breach of contract or deviation therefrom should generally be determined under the law and by the court chosen by the parties in the bill of lading. The “strong cause” test, once it is determined that the bill of lading otherwise binds the parties (for instance, that the bill of lading as it relates to jurisdiction does not offend public policy, was not the product of fraud or of grossly uneven bargaining positions), constitutes an inquiry into questions such as the convenience of the parties, fairness between the parties and the interests of justice, not of the substantive legal issues underlying the dispute.… [Emphasis added. Citations omitted.]

[42] In Expedition Helicopters Inc. v. Honeywell Inc., 2010 ONCA 351, 100 O.R. (3d) 241, at para. 24, leave to appeal refused, [2010] S.C.C.A. No. 258, the Ontario Court of Appeal stated:

A forum selection clause in a commercial contract should be given effect. The factors that may justify departure from that general principle are few. The few factors that might be considered include the plaintiff was induced to agree to the clause by fraud or improper inducement or the contract is otherwise unenforceable, the court in the selected forum does not accept jurisdiction or otherwise is unable to deal with the claim, the claim or the circumstances that have arisen are outside of what was reasonably contemplated by the parties when they agreed to the clause, the plaintiff can no longer expect a fair trial in the selected forum due to subsequent events that could not have been reasonably anticipated, or enforcing the clause in the particular case would frustrate some clear public policy. Apart from circumstances such as these, a forum selection clause in a commercial contract should be enforced.

[43] In BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 518, at para. 8, the Ontario Court of Appeal stated:

As interpreted by this court, a strong reason includes inordinate delay in raising the jurisdictional issue.… It follows that we do not read the decision in Expedition Helicopters Inc. v. Honeywell Inc … as foreclosing consideration of factors other than those listed therein at para. 24. Factors pertaining to justice or reasonableness may be considered in deciding whether the forum selection clause should be enforced. [Citations omitted.]

[44] In 2249659 Ontario Ltd. v. Sparkasse Siegen, 2013 ONCA 354, 115 O.R. (3d) 241, at para. 39, the Ontario Court of Appeal stated:

Forum selection clauses in an agreement between parties, particularly sophisticated commercial parties, will normally be enforced by Ontario courts. A plaintiff who seeks to litigate in Ontario, having agreed that the dispute would be litigated in another forum, carries a heavy burden and must show a “strong cause” for departing from the terms of the agreement.

[45] I now turn to apply these principles to the facts of this case. As noted, given the terms of the forum selection clause, the burden rests with the defendants to show that there is “strong cause” that Alberta is the more appropriate forum for this action.

Does the Forum Selection Clause Apply to the Factual Matrix of this Case?

[46] There is no suggestion that the forum selection clause in the Guarantees is unclear or that it does not, by its terms, apply to the plaintiffs’ claim against the defendants.

Is the Forum Selection Clause a Product of Uneven Bargaining Power?

[47] The defendants submit that they did not obtain legal advice before they signed the Guarantees and should have been advised to seek independent legal advice before doing so. They submit that the plaintiffs knew that they were under significant financial pressure at the time the Guarantees were signed.

[48] However, in my view, this submission fails given the circumstances: see HRH Investments Inc. v. Wexler, 2014 ONSC 2691, at para. 23. The defendants are sophisticated business people. It appears that this was the not first time that the defendants acted as personal guarantors. A demand letter from BNS, found at page 38 of the Defendants’ Motion Record, lists the defendants as personal guarantors. Further, the defendants understood, at least from the time of the delivery of the term sheet, that financing would not be provided unless personal guarantees were given. They had the choice of refusing this request and seeking financing elsewhere. The evidence also shows that the defendants’ lawyers were involved in the transaction on the day the draft guarantees were sent to them. The plaintiffs’ email with the draft Loan and Guarantees attached was sent to the defendants with a message to “review and execute at [their] convenience.” The email does not reflect any pressure to sign the documents without obtaining legal advice. In fact, the defendants did not return the signed documents to the plaintiffs until almost a full day later. I find that the defendants had the opportunity to seek the advice of their lawyers prior to signing the draft Guarantee delivered by the plaintiffs.

Does the Forum Selection Clause Offend Public Policy?

[49] The defendants rely on Roy v. North American Leisure Group Inc. (2002), 9 C.P.C. (6th) 270 and Straus v. Decaire, [2007] O.J. No. 1660, aff’d, 2007 ONCA 854. Based on these authorities, the defendants submit that the forum selection clause should not be enforced on grounds of public policy as it was not brought to their attention. I reject this submission. In my view, those cases are distinguishable as the parties challenging the enforcement of the forum selection clause on pre-printed forms were consumers, rather than sophisticated business people.

Is the Forum Selection Clause Part of the Guarantees?

[50] The defendants submit the forum selection clause is not an essential term of the contracts because it was not drawn to their attention prior to the time they signed the Guarantees. They submit that there was no meeting of the parties’ minds in respect of the forum selection clause.

[51] I dismiss this submission. First, there was no obligation on the plaintiffs to draw the forum selection clause to the defendants’ attention. Second, a person who signs a contract, particularly a business person, is taken to have read the contract that he or she signs and to have agreed to its terms.

Improper Forum Shopping/Loss of Juridical Advantage

[52] Sections 3 and 4 of the Guarantees Acknowledgement Act, R.S.A. 2000, c. G-11, provide:

3 No guarantee has any effect unless the person entering into the obligation (a) appears before a lawyer, (b) acknowledges to the lawyer that the person executed the guarantee, and (c) in the presence of the lawyer signs the certificate referred to in section 4.

4 (1) The lawyer, after being satisfied by examination of the person entering into the obligation that the person is aware of the contents of the guarantee and understands it, must issue a certificate in the prescribed form. (2) Every certificate issued under this Act shall be attached to or noted on the instrument containing the guarantee to which the certificate relates.

[53] The defendants submit that “[t]he plaintiffs, through the choice of law provisions in the Guarantees, have dragged this case back to Ontario in order to avoid the application of Alberta’s public policy to their guarantees. This choice of law has the effect of depriving the Defendants of substantive rights they have by law in Alberta.”

[54] In support of this argument, the defendants rely on Lloyd’s Underwriters v. Cominco Ltd., 2007 BCCA 249, 279 D.L.R. (4th) 257, at para. 78, aff’d, 2009 SCC 11, [2009] 1 S.C.R. 321, where the British Columbia Court of Appeal stated:

In the case at bar, Davies J. found that by commencing its proceedings in Washington State, TCML was hoping to avail itself of the advantages of Washington law for insured parties – the Washington courts’ approach to “sudden and accidental” events in insurance policies, its treatment of “response costs” as damages, its “continuous trigger” approach to property damage, and most importantly, the fact the Washington courts have rejected the allocation of liability between insurers and insureds, and (in the words of Mr. Zariski in his affidavit) have “indicated that any insurer that was on the risk when the triggering event occurred will be jointly and severally liable for the entire amount of damages up to its policy limit”. One of the lessons of Amchem, however, is not that parties are not entitled to pursue their own self-interest when it comes to choice of forum, but that they are not entitled to invoke the laws of a jurisdiction with which they have little or no connection, in order to avoid the laws of the jurisdiction which is the most appropriate forum for trying the dispute. This is what the Chambers judge found had occurred here, and in my view, the evidence supported his conclusion. I would dismiss this ground of appeal. [Underlining in original. Bold emphasis added.]

[55] Unlike the facts in Lloyd’s, the Guarantees in this case contain a choice of law provision within the forum selection clause, which provides that the laws of Ontario and Canada govern the Guarantees. Given the express language found in the choice of law provision, the Guarantees are governed by the laws of Ontario and Canada, not the laws of Alberta: see Vita Food Products Inc. v. Unus Shipping Co., [1939] UKPC 7, [1939] 2 D.L.R. 1, at para. 12. In any event, this is not a case where the laws of Ontario have little or no connection with the plaintiffs or the subject matter of the action. Accordingly, I find that the plaintiffs have not gained an unfair advantage by the enforcement of the forum selection clause.

Other Considerations

[56] The plaintiffs submit that many of the potential witnesses to this action are located in Ontario. The defendants submit that the majority of witnesses to this action are located in Alberta. These bald assertions by both parties are provided without explanation. Kenneth and Shaun reside in Alberta. Spencer resides in Ontario. There is no evidence of where Fradette or MacRae reside.

[57] The plaintiffs also submit that the defendants waived any right to challenge the forum selection clause when they executed the Forbearance Agreement and effectively waived any right to challenge their obligations under the Guarantee. The plaintiffs rely on the following provisions of the Forbearance Agreement:

• Section 4(b) – The defendants acknowledged and agreed that the indebtedness under the Loan, together with interest accrued and accruing thereon, and all fees, costs, expenses and other charges now or thereafter payable by the Borrower and the Defendants to the Plaintiffs are unconditionally owing by the Borrower and the Defendants to the Plaintiffs;
• Section 4(i) – The Defendants acknowledged and agreed that they have no defences, set-offs or counterclaims in respect of the Guarantees. If there are any such claims for set-off, counterclaim, claim, cause of action, damages or otherwise on any basis whatsoever against the Plaintiffs, they are expressly released and discharged and the Plaintiffs can rely upon the Forbearance Agreement as a full and complete answer to same;
• Section 4(h) – The Defendants acknowledged and agreed that the Guarantees are valid and binding obligations enforceable in accordance with their terms....;
• Section 9 – [I]n the event any of the terms of the Forbearance Agreement are breached or not fulfilled, the Defendants consented to judgment pursuant to the Guarantees in the amount of the indebtedness owing under the Loan...;
• Section 11 – The Defendants agreed that upon an event of default they shall be immediately liable for all amounts due and owing to the Plaintiffs… and the Plaintiffs shall be entitled to enforce all rights and remedies against the Defendants in accordance with applicable law and the Forbearance Agreement.

[58] In my view, the above considerations, when weighed together, far from establish that there is “strong cause” to find that the proper forum for this action is Alberta.

CONCLUSIONS

[59] I dismiss the defendants’ motion to stay this action. The defendants have not rebutted the presumption that Ontario is the proper forum for this action. Further, I find that the defendants have not shown strong cause to relieve them from the enforcement of the forum selection clause.

[60] I encourage the parties to resolve the issue of costs, failing which the plaintiffs shall file their submissions and an outline of costs within one week of today’s date and the defendants shall file their submissions within two weeks of today’s date. Costs submissions, exclusive of the outline of costs, shall be no more than three pages.

Mr. Justice M. D. Faieta Released: May 3, 2017