In Agrium v Orbis Engineering Field Services, 2022 ABCA 266, the majority of a three-member panel of the Court of Appeal of Alberta (the “Court of Appeal”) dismissed an appeal to overturn a decision staying the action in favour of arbitration. The Appellant, Agrium, Inc. (“Agrium”), commenced an action against the Respondents, Orbis Engineering Field Services Ltd., Elliott Turbomachinery Canada Inc., and Elliott Company (together, the “Respondents”), in relation to a dispute arising out of the parties’ services contract that included a mandatory arbitration agreement. The Respondents defended the claim, including on the ground that the arbitration agreement barred the action pursuant to s 7 of Alberta’s Arbitration Act (the “Act”). The Respondents’ initial application to stay the action was dismissed by Master Prowse on the grounds of waiver and attornment. The Respondents then appealed to a Justice of Alberta’s Court of King’s Bench. Before Justice Dilts, Agrium relied upon s 7(6) of the Act, which states that “[t]here is no appeal from the court’s decision under this section”. Agrium argued that thisprohibited the appeal. Justice Dilts dismissed this argument and allowed the Respondents’ appeal on the grounds that: (1) an appeal was permitted notwithstanding s. 7(6); and (2) the Respondents’ conduct did not amount to a waiver of their right to arbitrate. The majority of the Court of Appeal upheld Justice Dilts’ decision based on a similar analysis. Of note, Justice Wakeling wrote a 44-page dissenting opinion, which includes 140 paragraphs and 152 footnotes, as compared with the 34- paragraph majority decision (!).
Agrium commenced the action days before the limitation period was to expire and served the Respondents with the claim just before the time for service would have passed. The time limit to commence arbitration had “long expired” by the time the claim was served. The Respondents defended the action, alleging that the arbitration clause barred the action, but waited two years before seeking to stay the action.
The Master’s Decision: Master Prowse dismissed the Respondents’ application to stay the action on the basis of his supervisory jurisdiction rather than the grounds to refuse a stay under s 7(1) the Act, which states that, “[i]f a party to an arbitration agreement commences a proceeding in a court in respect of a matter in dispute to be submitted to arbitration under the agreement, the court shall, on the application of another party to the arbitration agreement, stay the proceeding.” Master Prowse held that as a result of the Respondents’ delay in seeking to stay the action, they could not rely on the grounds outlined under s 7(2) of the Act to refuse a request to stay because the time for arbitration had lapsed. Rather, the Respondents’ delay and participation in the proceedings amounted to a waiver of arbitration and an attornment to the court’s jurisdiction.
The Justice’s Decision: Justice Dilts granted the Respondents’ appeal of Master Prowse’s decision based on her finding that the facts did not support the conclusion that the Respondents had waived their right to rely on the arbitration agreement. Justice Dilts found that the Respondents acted promptly by pleading in their defence that they intended to rely on the arbitration agreement, and that none of the steps they had taken in the proceeding indicated a voluntary intention to forego arbitration.
In granting the appeal, Justice Dilts refused Agrium’s argument that s 7(6) of the Act precludes an appeal of a master’s decision. It states that, “there is no appeal from the court’s decision under this section”. “Court” is defined under the Act under s 1(1)(c)(i) with respect to section 7 as “the Court of Queen’s Bench and the Provincial Court.”
In addition to finding that the Respondents were entitled to appeal Master Prowse’s decision as of right if it was not made under the Act, Justice Dilts found that, based on the principles of statutory interpretation and the ordinary meaning of its words, s 7(6) does not preclude an appeal of a master’s decision to a judge of the same court. In particular, Justice Dilts noted that section 12 of the Court of King’s Bench Act (the “CKBA”) states that “[a]n appeal lies to a judge in chambers from a decision of a master in chambers.” Justice Dilts thus found that the Act and the CKBA could be interpreted harmoniously since the decision of a judge on an appeal from a master’s decision is a decision of the “court” identified in s 7(6), from which no appeal may be brought.
The Court of Appeal’s Decision: The majority of the Court of Appeal upheld Justice Dilts’ analysis and dismissed Agrium’s appeal of that decision.
Writing for the majority, Justice Crighton and Justice Ho emphasized the importance of the principles for harmonizing different statutes and stated (at para. ):
“It is also an important principle of statutory interpretation that conflict avoidance strategies such as the ‘specific overrides the general’ or ‘reading legislation down in certain circumstances and liberally in others’, should be avoided where no genuine conflict exists [citation omitted]….Here, Agrium’s attempt to ignore the statutory right of appeal that exists between the two levels of decision making within the Court of Queen’s Bench of Alberta manufactures a conflict that does not necessarily exist.”
The majority further held that even if CKBA s 12 conflicts with the statutory prohibition under s 7(6) of the Act, CKBA s 12 would take precedence as the provision that specifically addresses rights of appeal.
In addition, the majority of the Court of Appeal noted that legislation is presumed to have been enacted in compliance with the Constitution and stated (at para. ):
“… For over a hundred years, Alberta courts have characterized any deference to the decisions of provincially-appointed masters as fettering the discretionary jurisdiction of federally-appointed s 96 judges. As a result, the decision of a master in Alberta has always been subject to review by a s 96 judge, who has always heard the appeal on a de novo basis.”
Lastly, the majority agreed with Justice Dilts that the two Acts can be read harmoniously in that appeals under s 7(6) of the Act are prohibited beyond the Court of King’s Bench level of court: “This interpretation respects the constitutional limitations of the master’s decision, the statutory right of appeal in the Court of [King’s] Bench Act, and the statutory intention that arbitration matters not become bogged down in multiple levels of appeal reflected in the Arbitration Act.”
The majority thus dismissed Agrium’s appeal. The action was stayed in favour of the arbitration which was time barred.
Update: Leave to appeal to Supreme Court of Canada dismissed April 20, 2023
First, in their reasons, the majority noted that the case may be decided differently in Ontario as:
“ The courts in Ontario have not seen s 96 of the Constitution Act, 1867 as prohibiting the province from appointing an officer of the court (a master) who may exercise some judicial functions. Thus, Ontario is more willing to give greater deference to a master’s decisions, which includes permitting them to be the final word on certain types of decisions.”
Second, Justice Wakeling wrote a lengthy dissent in what he referred to as “ … an important statutory interpretation and constitutional case.” Justice Wakeling’s fundamental finding with respect to the statutory interpretation issue was that a master’s stay decision under s 7(1) of the Act is a decision of the Court of Queen’s Bench such that s. 7(6) serves to prohibit any appeal: “ Section 7(6) deprives a judge of the Court of Queen’s Bench of his or her jurisdiction to hear an appeal from an order of a master in chambers under section 7(1). This is crystal clear. ‘No appeal’ means ‘no appeal’.”
On the constitutional issue and contrary to the majority’s finding, Justice Wakeling held that s 96 of the Constitution Act, 1867 does not support the Respondents’ position. He outlined two reasons why interpreting s 7(6) to mean that a master’s decision is not appealable to a s. 96 judge is not ultra vires:
“ First, section 40(1) of the Supreme Court Act allows the party that is dissatisfied with the section 7(1) decision to apply for permission to appeal to the Supreme Court of Canada. This means that a master in chambers’ section 7(1) decision is not final and unreviewable. The Supreme Court of Canada is a superior court. Alberta does not have the constitutional authority to regulate the jurisdiction of the Supreme Court of Canada – deny the Supreme Court the jurisdiction to hear leave to appeal applications arising from section 7(1) orders.
 Second, a good argument may be made that a party adversely affected by a section 7(1) order may apply to a judge of the Court of Queen’s Bench of Alberta – a superior court – for judicial review. Section 7(6) of the Arbitration Act does not preclude judicial review of a section 7(1) order.”
As such, Justice Wakeling held that Justice Dilts did not have jurisdiction to hear the appeal of Master Prowse’s decision. He would have allowed Agrium’s appeal and permitted the action to proceed.
Third, it should be noted that “Masters” in Alberta are now referred to as “Application Judges”, and in Ontario as “Associate Judges”. The “Court of Queen’s Bench of Alberta” is now referred to as the” Court of King’s Bench of Alberta” following the death of Queen Elizabeth II and the accession of King Charles III.