Alberta – stay application lacks evidence required to demonstrate overlap/status of duplicative proceedings – #371

To decide whether to exercise her discretion to stay duplicative proceedings involving administrative action taken in two (2) provinces, Madam Justice Susan L. Bercov in Mema v. Chartered Professional Accountants of Alberta, 2020 ABQB 486 drew on principles stated in UCANU Manufacturing Corp v. Calgary (City), 2015 ABCA 22 which considered whether to issue a stay when the duplicative proceedings involved a court action and an arbitration.  Bercov J. declined to exercise her discretion due to applicant’s failure to meet his evidentiary burden to establish the overlap and status of the duplicative proceedings. Her comments on applicant’s evidence help guide arbitration practitioners invoking overlap with arbitration.  The note also lists recent Alberta cases applying those principles to stays involving arbitration.

A member of the Chartered Professional Accountants of Alberta (“CPAA”), VM had received two (2) notices of hearing issued by the CPAA regarding provisions of the Chartered Professional Accountants Act, SA 2014, c C-10.2 (“Notices”).  VM filed an originating application seeking, among other relief, a stay of those Notices on the basis that, among other reasons, duplicative proceedings were ongoing.

Bercov J. held that she had no jurisdiction to grant a stay of the Notices.  See paras 40-48.  In the event that she was mistaken, Bercov J. then considered, at para. 49 and following, whether she should exercise her discretion to grant a stay.

She first determined that the CPAA had jurisdiction over VM for conduct occurring in another province.  See paras 50-54.  Bercov J. then identified the real issue in dispute as being “whether the administrative proceedings in Alberta and British Columbia are duplicative and whether British Columbia is the appropriate forum to resolve the complaints”.

She observed that neither VM nor CPAA provided case law on the factors a court should consider in exercising its discretion to stay what she termed as “duplicitous” proceedings.  She then turned to the decision of the Alberta Court of Appeal in UCANU Manufacturing Corp v. Calgary (City), 2015 ABCA 22 which considered whether to issue a stay when the duplicative proceedings involved a court action and an arbitration. Acknowledging that the case before her involved two (2) administrative proceedings, Bercov J. found the factors “instructive”.

[7] The parties agree that the Court of Queen’s Bench has the jurisdiction to grant a stay of proceedings in favour of a party to an action pending the outcome of a related arbitration, in that regard see: [Jardine Lloyd Thompson Canada Inc v Western Oil Sands Inc, 2006 ABQB 933] and Yaworksi v Gowling Lafleur Henderson LLP, 2013 ABCA 21. As was noted by the court in Western Oil Sands, the remedy is discretionary and must be exercised in accordance with established principles. The factors to be considered are (i) whether the issues in the arbitration are substantially the same as the issues in the action, (ii) the defendant must satisfy the court that the continuance of the action would work an injustice, and (iii) the stay must not cause an injustice to the plaintiff. In that case Wittmann ACJ (as he then was) noted that the court must bear in mind the efficient resolution of disputes and the efficient management of the resources of the court and the parties. In the Yaworski decision, this Court concluded that the combination of section 7 of the Arbitration Act, section 18 of the Judicature Act, RSA 2000, c J-2,  and the court’s inherent jurisdiction to control its own process to avoid unnecessary and duplicitous proceedings provide a chambers judge with the jurisdiction to stay a third party suit pending a related arbitration: at para 23”.

Bercov J. then evaluated whether VM met the evidentiary standard to demonstrate that the proceedings were “duplicitous” and, in her analysis, offered insights relevant to arbitration practitioners tasked with demonstrating similar overlap.

Bercov J. noted VM’s argument that the Alberta and B.C. proceedings were “identical” and that the relief sought in both provinces was “identical”.  VM argued that “[h]e should not have to defend the same allegations in two jurisdictions at the same time”.  Despite CPAA’s challenge to those arguments, Bercov J. accepted that certain of the Alberta and B.C. proceedings were identical and other “very similar”.  That said, Bercov J. held that VM had failed to provide the necessary evidence needed for her to exercise her discretion and declined to exercise it.  She did note that, if circumstances changed, whereby VM would be facing the same charges at the same time in both jurisdictions, VM may make an application to one of the tribunals for a stay of their proceedings pending determination by the other jurisdiction.

Bercov J.’s comments on the evidentiary record lend themselves to applications to stay involving arbitrations.

[60] The Notices are not in evidence. There is no evidence of what allegations British Columbia is investigating. There is also no evidence as to how the rules and procedures of the two entities differ. British Columbia has not yet reached any decision on whether to issue citations. The investigation in British Columbia is on hold pending the resolution of the Alberta proceedings. [VM] argues that the fact that the British Columbia proceedings are on hold makes no difference because there is no suggestion that British Columbia is not proceeding.

[61] I agree with [VM] that he should not have to defend the same allegations in two jurisdictions at the same time. The onus is on [VM] to prove on a balance of probabilities that continuation of the Notices will work an injustice to him. I am not satisfied on the evidence that [VM] has met this burden. There is no evidence as to what charges Alberta is proceeding with as set out in the Notices. There is no evidence as to what potential charges British Columbia is investigating. It is not clear from the evidence that following the conclusion of these proceedings, British Columbia will continue their proceeding, regardless of the outcome of these proceedings. In my view, this application is premature”.

urbitral note – First, the principles stated in UCANU Manufacturing Corp v. Calgary (City), 2015 ABCA 22 have been considered in stays involving arbitration:

(i) Novatrax International Inc. v. Hägele Landtechnik GmbH, 2016 ONCA 771 paras 24-26

(ii) Serendipity Ventures Inc v. Winters, 2016 ABQB 398 para. 41

(iii) Macdonald v. Burke, 2018 ABQB 534 para. 52

(iv) Toyota Tsusho Wheatland Inc v. Encana Corporation, 2016 ABQB 209 para. 70

(v) ATS Automation Tooling Systems Inc v. Chubb Insurance Company of Canada, 2018 ONSC 6139 para. 50

(vi) Canadian Natural Resources Limited v. Flatiron Constructors Canada Limited, 2018 ABQB 613 para. 47