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NATURE OF CONTRACT - Conflict of laws - Governing law

Tuesday, February 18, 2020 @ 9:13 AM  


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Appeal by the defendant, Pioneer Steel Manufacturers, from refusal of a stay of proceedings based on a forum selection clause. The plaintiff, Schuppener, suffered serious injuries when a steel storage building purchased from the defendant collapsed on him. The accident occurred at the plaintiff’s British Columbia property. The plaintiff commenced an action in British Columbia seeking damages for negligence and breach of contract. The defendant sought a stay based on a forum selection clause in the parties’ purchase agreement that required all claims be brought in Ontario. The chambers judge found there were strong reasons not to enforce the forum selection clause and refused to stay or transfer the action. The defendant appealed.

HELD: Appeal allowed. Although the judge correctly identified the strong cause test, he erred in its application. The judge erred in principle by characterizing ordinary considerations as matters of public policy compelling enough to justify overriding the forum selection clause. The inclusion of a forum selection clause in a non-negotiable standard form consumer contract did not always raise a public policy concern sufficient to offset the public policy interest in holding parties to the terms of their bargain. The parties’ contract did not involve a significant inequality of bargaining power or particularly complicated terms. It was a significant transaction akin to the purchase of a vehicle rather than a minor consumer transaction. There was nothing unique to British Columbia about the cause of the building’s collapse from the weight of snow that had accumulated on its roof. The judge properly found that the forum selection clause was sufficiently broad to include all the plaintiff’s claims. The action was transferred to the Ontario Superior Court.

Schuppener v. Pioneer Steel Manufacturers Ltd., [2020] B.C.J. No. 63, British Columbia Court of Appeal, H. Groberman, L.A. Fenlon and DeWitt-Van Oosten JJ.A., January 21, 2020. Digest No. TLD-February172020002