In Grewal v. Mann, 2019 BCSC 433, Mr. Justice Dennis Hori held that neither party was entitled to special costs following one party’s decision to file an action in court and the other party’s decision to apply for a stay of proceedings. In a dispute familiar to courts across Canada, both parties disputed the role of arbitration but, as Hori J. held, each appeared to genuinely pursue their legal remedies and in doing so did not commit any abuse of the court’s process.
Continue reading “B.C. – no abuse of court process by either litigant simply by seeking or resisting arbitration – #187”Québec – arbitration agreement with optional wording not a complete undertaking to arbitrate – #186
In Prométal inc. v. Maxim Construction inc., 2019 QCCS 1207, Mr. Justice Bernard Tremblay refused to refer the litigants to arbitration, holding that they had failed to agree in a clear and unequivocal way to exclude the resolution of their disputes from the courts. To allow defendant to present its motion for referral, Tremblay J. applied the longer 90 day delay available under article 622 of Québec’s Code of Civil Procedure, CQLR c C-25.01 to do so, holding that the standard, shorter 45 day delay did not apply because some of the dispute involved elements outside of Québec.
Continue reading “Québec – arbitration agreement with optional wording not a complete undertaking to arbitrate – #186”Supreme Court – cumbersome task of sorting of consumer/non-consumer claimants does not authorize courts to re-cast arbitral legislation – #185
Canada’s Supreme Court in TELUS Communications Inc. v. Wellman, 2019 SCC 19 held that section 7(5) of Ontario’s Arbitration Act, 1991, SO 1991, c 17 does not give courts discretion to refuse to stay claims dealt with by an otherwise valid arbitration agreement. Though Ontario’s Consumer Protection Act, 2002, SO 2002, c 30, Sch A invalidates arbitration agreements to the extent they prevent consumers from pursuing claims in court, that policy choice does not extend to non-consumers who remain bound by their agreements to arbitrate. Courts are to interpret legislation and not re-write it.
Continue reading “Supreme Court – cumbersome task of sorting of consumer/non-consumer claimants does not authorize courts to re-cast arbitral legislation – #185”Ontario – once court finds arbitrator acted within jurisdiction, it cannot consider merits in exercise of that jurisdiction – #184
Ontario’s Court of Appeal held in Alectra Utilities Corporation v. Solar Power Network Inc., 2019 ONCA 254 that, under section 46(1)3 of the Arbitration Act, 1991, SO 1991, c 17, once a court satisfies itself that an arbitrator had jurisdiction to resolve a particular dispute, absent a right of appeal, the court has no authority to delve into the merits of the award and review its for reasonableness. The Court held that a jurisdictional question must be answered correctly but “neither requires nor authorizes review of the substance of an arbitrator’s award”.
Continue reading “Ontario – once court finds arbitrator acted within jurisdiction, it cannot consider merits in exercise of that jurisdiction – #184”B.C. – no arbitral error where arbitrator seeks assistance on legal principles raised in, but beyond, parties’ authorities – #183
In MSI Methylation Sciences, Inc. v. Quark Ventures Inc., 2019 BCSC 440, Madam Justice Elaine J. Adair dismissed claims that the arbitrator had committed arbitral error due to breach of natural justice by allegedly (i) deciding the dispute on authorities not submitted by either party and (ii) adopting his own theory of damages not advanced by either party. Adair J. held that the legal principles were not obscure legal points raised for the first time, created by the arbitrator or divorced from the cases and argument submitted by the parties. Adair J. also held that the arbitrator did not commit arbitral error by not referring to each of a party’s submissions or seeking assistance beyond authorities submitted.
Continue reading “B.C. – no arbitral error where arbitrator seeks assistance on legal principles raised in, but beyond, parties’ authorities – #183”Ontario – unpaid expert and arbitrator denied status as creditors of court order omitting their mention as beneficiaries – #182
In Miracle v. Maracle, 2019 ONCA 238, the Ontario Court of Appeal upheld the unreported September 10, 2018 decision by Mr. Justice Patrick Hurley denying an unpaid expert and unpaid arbitrator leave to be added as parties to post-arbitration litigation. In doing so, Hurley J. left open the possibility that the result could have been different had an earlier court order, recognizing and enforcing the arbitration award, mentioned personally the expert and arbitrator as beneficiaries of the orders for payment of arbitration costs incurred by the prevailing arbitral party. Hurley J.’s comments also serve to guide arbitration counsel in drafting dispositive sections for recognition and enforcement applications.
Continue reading “Ontario – unpaid expert and arbitrator denied status as creditors of court order omitting their mention as beneficiaries – #182”B.C. – corporation unsuccessfully uses indoor management rule and alleged forgery to challenge arbitration result – #181
In Sun Wave Forest Products Ltd. v Prince Rupert (City), 2019 BCSC 415, Mr. Justice Neill Brown dismissed a challenge to arbitration activity based on the challenger’s allegations that the arbitration stemmed from forgery, fraud and a lack of authority. In lengthy reasons, Brown J. discussed the evidentiary burden required to establish forgery and fraud in civil matters and the role of the indoor management rule in binding negotiations.
Continue reading “B.C. – corporation unsuccessfully uses indoor management rule and alleged forgery to challenge arbitration result – #181”Ontario – stay application dismissed without prejudice to re-apply after pleadings close – #180
Having relieved Defendant from a partial default judgment, Mr. Justice Andrew A. Sanfilippo in Natural Energy Systems Inc. v. Hallett, 2019 ONSC 1372 dismissed Defendant’s application for a stay but without substantive determination and without prejudice to Defendant’s opportunity to re-apply after the close of pleadings. In doing so, Sanfilippo J. implicitly authorized Defendant to take further steps in the litigation without any deemed waiver of right to invoke arbitration agreement at a later date and to do so even if the arbitration agreement covered only half of the claims made in the court litigation.
Continue reading “Ontario – stay application dismissed without prejudice to re-apply after pleadings close – #180”B.C. – shareholders waive arbitration to resolve management deadlock – #179
In No. 20 CR Ventures Ltd. v Andrex Developments (1985) Ltd., 2019 BCSC 405, Mr. Justice John J. Steeves distinguished the requirements for establishing oppression and deadlock and, having concluded that deadlock existed, issued a series of orders leading to the liquidation of the corporation. Despite having initially included an agreement to arbitrate deadlock, the shareholders opted to pursue their disagreement in court. For a recent case considering whether arbitration is an appropriate format to operate a business, see the Arbitration Matters note “Québec – arbitration not appropriate to conduct business or resolve operating disagreements”.
Continue reading “B.C. – shareholders waive arbitration to resolve management deadlock – #179”Ontario – arbitrator appointment procedure in franchise agreement risks “absurd and likely unfair result” – #178
In Eggiman v. Martin, 2019 ONSC 1388, Mr. Justice Wolfram Tausendfreund exercised his discretion to refuse a partial stay because the claims subject to arbitration were based on closely related facts and issues in dispute and a partial stay would likely bifurcate the claims, leading to a multiplicity of proceedings. In addition, Tausendfreund J. considered that the right of a franchisor to appoint the arbitrator for a dispute between franchisee and sub-franchisees would lead to “the absurd and likely unfair result of allowing [that party] to either appoint the arbitrator or effect control and/or direct the arbitration of this dispute”.
Continue reading “Ontario – arbitrator appointment procedure in franchise agreement risks “absurd and likely unfair result” – #178”